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, 1997                   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,  1997,  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, 1997   September 30, 1997
<S>                                                                <C>                  <C>  
ASSETS
Current Assets
  Cash                                                                    $871,000          $1,153,000
  Accounts Receivable                                                   20,338,000          20,154,000
  Costs and Estimated Profits of Uncompleted
   Contracts in Excess of Related Billings                              12,428,000          15,077,000
  Prepaid Income Taxes                                                     503,000             503,000
  Other Current Assets                                                     769,000           1,223,000
                                                                           -------           ---------

  Total Current Assets                                                  34,909,000          38,110,000

Property and Equipment                                                   7,535,000           7,466,000

  Less Accumulated Depreciation                                          6,284,000           6,127,000
                                                                         ---------           ---------

    Net Property and Equipment                                           1,251,000           1,339,000

Deferred Income Taxes                                                    1,660,000           1,660,000

Other Assets                                                               650,000             716,000
                                                                           -------             -------

      TOTAL                                                            $38,470,000         $41,825,000
                                                                       ===========         ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
  Current Liabilities
    Notes and Accounts Payable                                          $8,804,000         $16,567,000
    Accrued Wages and Expenses                                           7,700,000           7,851,000
    Billings on Uncompleted Contracts in Excess of
      Related Costs                                                      8,450,000           4,386,000
                                                                         ---------           ---------

      Total Current Liabilities                                         24,954,000          28,804,000

  Long-Term Debt                                                         1,902,000           1,819,000

  Stockholders' Equity
    Preferred Stock                                                              0                   0
    Common Stock                                                         1,921,000           1,921,000
    Capital Surplus                                                      3,003,000           3,003,000
    Retained Earnings                                                    7,086,000           6,674,000
                                                                         ---------           ---------

      Total                                                             12,010,000          11,598,000
        Less:  Treasury Stock                                              271,000             271,000
                  Loans Receivable from Officers                           125,000             125,000
                                                                           -------             -------

      Total Stockholders' Equity                                        11,614,000          11,202,000

      TOTAL                                                            $38,470,000         $41,825,000
                                                                       ===========         ===========
</TABLE>



<PAGE>


                        STV GROUP, INC., AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                    UNAUDITED
<TABLE>
<CAPTION>

                                                                    THREE MONTHS ENDED
                                                                       December 31
                                                                  1997            1996
<S>                                                        <C>              <C>   

Operating Activities
  Net Income                                                     $412,000        $158,000
  Adjustments to reconcile net income to
    net cash provided by operating activities
      Depreciation and Amortization                               185,000         218,000
  Changes in Operating assets and liabilities
      Accounts Receivable                                        (184,000)        (86,000)
      Costs of uncompleted contracts in
        excess of billings and prepaid expenses                 3,103,000      (1,039,000)
      Accounts Payable and accrued expenses                      (843,000)     (1,816,000)
      Billing in excess of related costs                        4,064,000         448,000
      Current Income Taxes                                        371,000          89,000
                                                                  -------          ------
Net Cash provided by operating activities                      $7,108,000     ($2,028,000)

Investing Activities
  Purchase of Property and Equipment                              (69,000)       (255,000)
  Purchase of Software                                             (7,000)         (3,000)
  Decrease (Increase) in other assets                              45,000          17,000
                                                                   ------          ------
    Net Cash provided (used) by investing activities             ($31,000)      ($241,000)

Financing Activities
  Proceeds from line of credit and long term
    borrowings                                                 24,125,000      24,260,000
  Principal payments on line of credit and long
    term borrowings                                           (31,484,000)    (22,103,000)
                                                              -----------     ----------- 
    Net Cash (used) provided by financing
      activities                                              ($7,359,000)     $2,157,000

  Increase (decrease) in cash and equivalents                    (282,000)       (112,000)
  Cash and equivalents at beginning of year                     1,153,000          28,000
                                                                ---------          ------
    Cash and equivalents at end of period                        $871,000        ($84,000)
                                                                 ========        ======== 

</TABLE>


<PAGE>


                        STV GROUP, INC., AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME

                                    UNAUDITED
<TABLE>
<CAPTION>

                                                            THREE MONTHS ENDED
                                                               December 31
                                                        1997               1996
<S>                                               <C>               <C>  

Revenue

  Total Revenue                                       $24,135,000       $22,736,000
    Less Subcontract and Procurement Costs              4,977,000         4,613,000
                                                        ---------         ---------

  Operating Revenue                                   $19,158,000       $18,123,000

Costs and Expenses

  Costs of Services and Sales                          16,575,000        16,205,000
  General and Administrative                            1,530,000         1,249,000
  Interest                                                259,000           327,000
                                                          -------           -------

Total Costs and Expenses                               18,364,000        17,781,000

Income Before Income Taxes                                794,000           342,000

Income Taxes                                              382,000           184,000
                                                          -------           -------

Net Income                                               $412,000          $158,000
                                                         ========          ========

Net Income per share:                                       $0.22             $0.08

Weighted Average Number
  of Shares Outstanding                                 1,905,744         1,898,705

</TABLE>


<PAGE>


               Notes to Consolidated Condensed Financial Statement

                                December 31, 1997

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, 1998 due in part to  increased  reliance on  estimates at interim
dates.

2 - EARNINGS PER SHARE

SFAS No. 128,  "Earnings  per Share," has been adopted by the Company.  SFAS 128
replaces  primary  earnings per share (EPS) with basic EPS and fully diluted EPS
with diluted  EPS.  Basic EPS is computed by dividing net income by the weighted
average number of shares of common stock outstanding during the period.  Diluted
EPS recognizes the potential  dilutive  effects of the future exercise of common
stock options.

<TABLE>
<CAPTION>
                                                  THREE MONTHS ENDED
                                    December 31, 1997            December 31, 1996
                                    -----------------            -----------------
<S>                                  <C>                         <C> 

Basic earnings per share                     $0.23                       $0.09
Shares outstanding                       1,821,246                   1,821,246

Diluted earnings per share                   $0.22                       $0.08
Shares outstanding                       1,905,744                   1,898,705

</TABLE>




<PAGE>


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

Total  revenues for the quarter ended December 31, 1997 (first quarter of fiscal
1998)  increased  6.2% as  compared  to the first  quarter  of  fiscal  1997 and
decreased 3.6% as compared to the previous  quarter.  Operating  revenues (total
revenues  excluding  pass  through  costs) for the first  quarter of fiscal 1998
increased  5.7% as  compared to the first  quarter of fiscal 1997 and  increased
4.0% as compared to the previous  quarter.  The  increase in operating  revenues
reflects  an  increase in the demand for the firm's  work,  particularly  in the
transportation area.

Pass-through  costs,  expressed as a percentage of total  revenues  increased to
20.6% as  compared to 20.3% in the first  quarter of fiscal  1997 and  decreased
from 26.4% 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, decreased to
86.6% as compared to 89.5% for the first quarter of fiscal 1997 and 87.4% in the
fourth quarter of fiscal 1997. The decreases in the percentage for both quarters
is primarily  due to operating  revenues  increasing  at a greater pace than did
cost of services.

General and  administrative  expense,  expressed  as a  percentage  of operating
revenues, increased to 8.0% in the first quarter of fiscal 1998 from 6.9% in the
first quarter of fiscal 1997 and 7.6% in the previous quarter. This increase was
due mainly to an increase in labor related expenses.

Interest, expressed as a percentage of operating revenues, decreased to 1.4% for
the first  quarter of fiscal 1998 from 1.8% of the first  quarter of fiscal 1997
and 1.9% from the previous  quarter.  The decreases in the  percentage  for both
quarters  is due to lower  borrowings  as a  result  of an  improvement  in cash
receipts.

Income tax  expense  for the first  quarter of fiscal  1998 was 48.1% of pre-tax
income  compared  to 53.8% in the first  quarter of fiscal 1997 and 49.7% in the
fourth quarter of 1997. The decrease is due to lower non-deductible  expenses as
a percentage of a higher first and fourth quarter pre-tax income.


<PAGE>


Earnings per common  share  calculated  using the Treasury  Stock Method for the
first quarter of fiscal 1998 were 22 cents based on 1,905,744 shares outstanding
which  increased  from 8 cents for the first  quarter  of fiscal  1997  based on
1,898,705 shares outstanding.

Financial Condition

Working capital increased to $9,955,000 from $9,306,000 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 $9.1 million is
currently  available.  The Company is in final  discussions  with its lender and
anticipates a reduction of $1.0 million in its line of credit and a reduction in
its interest rate of 1/2 percent to 1 percent above the prime rate.  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 $120 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 11, 1998                       By:  /s/ Michael Haratunian
---------------------                          ----------------------
         Date                                  Michael Haratunian
                                               Chairman, Chief Executive Officer






  February 11, 1998                       By:  /s/ Peter W. Knipe
---------------------                          ----------------------
         Date                                  Peter W. Knipe
                                               Secretary/Treasurer