SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549


                                    FORM 10Q

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

FOR QUARTER ENDED DECEMBER 31, 1996                   COMMISSION FILE NO. 0-3415

                               STV GROUP, INCORPORATED
(Exact name of registrant as specified in its charter)


     Pennsylvania                                              23-1698231
(State or other jurisdiction of                 (I.R.S. Employer Identification)
 incorporation or organization)


205 West Welsh Drive, Douglassville, Pennsylvania                 19518       
(Address of principal executive offices)                       (Zip Code)


                                     (610) 385-8200
(Registrant's telephone number, including area code)


Securities registered pursuant to Section 12(g) of the Act:


                           Common Stock $1.00 par value
                                (Title of class)


As of December  31,  1996,  there were  1,821,246  shares of common stock of the
registrant outstanding.

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months, (or for such shorter period that the registrant was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.


                                    YES X        NO



<PAGE>


           PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

         STV GROUP, INC., AND SUBSIDIARIES

       CONSOLIDATED CONDENSED BALANCE SHEETS

                     UNAUDITED
<TABLE>
<CAPTION>

                                                       December 31, 1996      September 30, 1996
<S>                                                  <C>                   <C>

ASSETS
Current Assets
  Cash                                                       ($84,000)            $28,000
  Accounts Receivable                                      20,589,000          20,504,000
  Costs and Estimated Profits of Uncompleted
   Contracts in Excess of Related Billings                 15,266,000          14,290,000
  Deferred tax benefit                                        180,000             180,000
  Other Current Assets                                      1,641,000           1,577,000
                                                            ---------           ---------

  Total Current Assets                                     37,592,000          36,579,000

Property and Equipment                                     12,556,000          12,301,000

  Less Accumulated Depreciation                            11,185,000          10,987,000
                                                           ----------          ----------

    Net Property and Equipment                              1,371,000           1,314,000

Deferred Tax Benefit                                        1,369,000           1,369,000

Other Assets                                                  698,000             733,000
                                                              -------             -------

      TOTAL                                               $41,030,000         $39,995,000
                                                          ===========         ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
  Current Liabilities
    Notes and Accounts Payable                            $17,125,000         $16,051,000
    Accrued Wages and Expenses                              6,901,000           7,489,000
    Billings on Uncompleted Contracts in Excess of
      Related Costs                                         4,766,000           4,318,000
                                                            ---------           ---------

      Total Current Liabilities                            28,792,000          27,858,000

  Long-Term Debt                                            1,738,000           1,795,000

  Stockholders' Equity
    Preferred Stock                                                 0                   0
    Common Stock                                            1,921,000           1,921,000
    Capital Surplus                                         3,003,000           3,003,000
    Retained Earnings                                       5,972,000           5,814,000
                                                            ---------           ---------

      Total                                                10,896,000          10,738,000
        Less:  Treasury Stock                                 271,000             271,000
               Loans Receivable from Officers                 125,000             125,000
                                                              -------             -------

      Total Stockholders' Equity                           10,500,000          10,342,000

      TOTAL                                               $41,030,000         $39,995,000
                                                          ===========         ===========

</TABLE>


<PAGE>


        STV GROUP, INC., AND SUBSIDIARIES

      CONSOLIDATED STATEMENTS OF CASH FLOWS

                    UNAUDITED
<TABLE>
<CAPTION>

                                                           THREE MONTHS ENDED
                                                               December 31
                                                          1996            1995
<S>                                                 <C>              <C>

Operating Activities
  Net Income                                             $158,000        $103,000
  Adjustments to reconcile net income to
    net cash provided by operating activities
      Depreciation and Amortization                       218,000         291,000
      Other                                                     0        (129,000)
  Changes in Operating assets and liabilities
      Accounts Receivable                                 (86,000)     (1,972,000)
      Costs of uncompleted contracts in
        excess of billings and prepaid expenses        (1,039,000)        959,000
      Accounts Payable and accrued expenses            (1,816,000)        621,000
      Billing in excess of related costs                  448,000         692,000
      Current Income Taxes                                 89,000         110,000
                                                           ------         -------
Net Cash provided by operating activities             ($2,028,000)       $675,000

Investing Activities
  Purchase of Property and Equipment                     (255,000)        (30,000)
  Purchase of Software                                     (3,000)         (1,000)
  Decrease (Increase) in other assets                      17,000         (23,000)
                                                           ------         ------- 
    Net Cash provided (used) by investing activities    ($241,000)       ($54,000)

Financing Activities
  Proceeds from line of credit and long term
    borrowings                                         24,260,000      19,150,000
  Principal payments on line of credit and long
    term borrowings                                   (22,103,000)    (20,252,000)
                                                      -----------     ----------- 
    Net Cash (used) provided by financing
      activities                                       $2,157,000     ($1,102,000)

  Increase (decrease) in cash and equivalents            (112,000)       (481,000)
  Cash and equivalents at beginning of year                28,000         668,000
                                                           ------         -------
    Cash and equivalents at end of period                ($84,000)       $187,000
                                                         ========        ========

</TABLE>


<PAGE>


       STV GROUP, INC., AND SUBSIDIARIES

       CONSOLIDATED STATEMENTS OF INCOME

                   UNAUDITED
<TABLE>
<CAPTION>

                                                    THREE MONTHS ENDED
                                                        December 31
                                                    1996         1995
<S>                                         <C>             <C>   

Revenue

  Total Revenue                                 $22,736,000    $22,983,000
    Less Subcontract and Procurement Costs        4,613,000      4,979,000
                                                  ---------      ---------

  Operating Revenue                             $18,123,000    $18,004,000

Costs and Expenses

  Costs of Services and Sales                    16,205,000     16,121,000
  General and Administrative                      1,249,000      1,205,000
  Interest in Joint Venture                               0         (4,000)
  Interest                                          327,000        428,000
                                                    -------        -------

Total Costs and Expenses                         17,781,000     17,750,000

Income Before Income Taxes                          342,000        254,000

Income Taxes                                        184,000        151,000
                                                    -------        -------

Net Income                                         $158,000       $103,000
                                                   ========       ========

Earnings per share:                                   $0.08          $0.06

Weighted Average Common Shares and
  Equivalents                                      1,898,705      1,865,182




</TABLE>


<PAGE>


               Notes to Consolidated Condensed Financial Statement

                                December 31, 1996

1 - BASIS OF PRESENTATION

The accompanying unaudited consolidated condensed financial statements have been
prepared in accordance  with the  instruction  to Form 10-Q and therefore do not
include all  information  and  footnotes  necessary for a fair  presentation  of
financial  position,  results of operations,  and cash flows in conformity  with
generally accepted accounting principles.

It should be understood  that the foregoing  interim results are not necessarily
indicative  of the  results  of  operations  for the  full  fiscal  year  ending
September  30, 1997 due in part to  increased  reliance on  estimates at interim
dates.








<PAGE>


Item 2.  Management Discussion and Analysis of the Results of Operation

Total  revenues for the quarter ended December 31, 1996 (first quarter of fiscal
1997)  decreased  1.1% as  compared  to the first  quarter  of  fiscal  1996 and
increased 0.7% as compared to the previous  quarter.  Operating  revenues (total
revenues  excluding  pass  through  costs) for the first  quarter of fiscal 1997
increased  0.7% as  compared to the first  quarter of fiscal 1996 and  increased
3.9% as compared to the previous  quarter.  The  increase in operating  revenues
reflects an increase in the demand for transportation engineering.

Pass-through  costs,  expressed as a percentage of total  revenues  decreased to
20.3% as compared to 21.7% in the first  quarter of fiscal 1996 and 22.8% in the
previous  quarter.  Pass-through  costs  will  vary  depending  on the  need for
specialty subconsultants and governmental subcontract requirements.

Cost of  services,  expressed as a percentage  of operating  revenues,  remained
constant at 89.5% for the first quarter of fiscal 1997 from the first quarter of
fiscal 1996 and increased  from 88.6% in the fourth  quarter of fiscal 1996. The
increase in the  percentage  from the fourth quarter of fiscal 1996 to the first
quarter of fiscal 1997 was due mainly to an increase in salary related  expenses
and other indirect expenses as a component of revenue.

General and  administrative  expense,  expressed  as a  percentage  of operating
revenues,  increased  slightly to 6.9% in the first  quarter of fiscal 1997 from
6.7% in the first  quarter  of  fiscal  1996 but was  comparable  to 6.9% in the
previous quarter.

Interest, expressed as a percentage of operating revenues, decreased to 1.8% for
the first  quarter of fiscal 1997 from 2.4% of the first  quarter of fiscal 1996
and 2% from  the  previous  quarter.  As a  dollar  amount,  interest  decreased
$101,000 in the first  quarter of fiscal 1997  compared to the first  quarter of
fiscal 1996 due  primarily  to a decrease in borrowing  and also lower  interest
rates.

Income tax  expense  for the first  quarter of fiscal  1997 was 53.8% of pre-tax
income  compared to 59.4% in the first  quarter of fiscal 1996.  The decrease is
due to lower  non-deductible  expenses as a percentage of a higher first quarter
pre-tax income.




<PAGE>


Earnings  per common  share for the first  quarter  of fiscal  1997 were 8 cents
based on 1,898,705 shares outstanding which increased from 6 cents for the first
quarter of fiscal 1996 based on 1,865,182  shares  outstanding  primarily due to
lower interest costs.

Financial Condition
Working capital increased to $8,800,000 from $8,721,000 in the previous quarter.
Capital  resources  available to the Company included an existing line of credit
for working  capital.  The current  limit is a maximum of $16.5 million based on
accounts receivable and  work-in-progress of which approximately $3.4 million is
currently  available.  The Company is in  discussions  with its lender which may
reduce its line of credit.  The  Company  believes  that it and the lender  will
maintain a line of credit  adequate  to meet the  current  and future  financial
needs of the  Company.  The  Company is  planning  to  continue  its  program of
purchasing  computer-assisted  design and  drafting  equipment  as well as a new
project management and accounting system.

The Company's backlog is approximately $125 million.






<PAGE>


SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.







STV GROUP, INCORPORATED
         (Registrant)




  February 14, 1997                       By:  /s/ Michael Haratunian
---------------------                          ----------------------
         Date                                  Michael Haratunian
                                               Chairman, Chief Executive Officer






  February 14, 1997                       By:  /s/ Peter W. Knipe
---------------------                          -------------------
         Date                                  Peter W. Knipe
                                               Secretary/Treasurer