SECURITIES AND EXCHANGE COMMISSION
                            Washington, DC 20549-1004

              -----------------------------------------------------


                                    FORM 10-Q

                                   (Mark One)

(X)      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 1998

(  )     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                         Commission File Number 0-20793

                           Smithway Motor Xpress Corp.
             (Exact name of registrant as specified in its charter)


         Nevada                                        42-143384
(State or other jurisdiction            (I.R.S. employer identification number)
of incorporation or organization)

                                2031 Quail Avenue
                             Fort Dodge, Iowa 50501
                                 (515) 576-7418
               (Address, including zip code, and telephone number,
                      including area code, of registrant's
                           principal executive office)

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 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2)  has  been  subject  to the  filing
requirements for at least the past 90 days.

                                                YES X     NO

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date (November 9, 1998 ).

             Class A Common Stock, $.01 par value: 4,015,143 shares
             Class B Common Stock, $.01 par value: 1,000,000 shares

                        
Exhibit Index is on Page 19.
                                                            Page Number 1 of 21
<PAGE>



                                     PART I
                              FINANCIAL INFORMATION


                                                                           PAGE
                                                                          NUMBER
Item 1.  Financial Statements..........................................   3-10
         Condensed Consolidated Balance Sheets as of 
          December 31, 1997 and September 30, 1998 (unaudited).........   3-4
         Condensed Consolidated Statements of Earnings for the
          three and nine months ended September 30, 1998 
          and 1997(unaudited)..........................................   5
         Condensed Consolidated Statements of Stockholders' Equity for 
          the year ended December 31, 1997, and the nine months 
          ended September 30, 1998 (unaudited).........................   6
         Condensed Consolidated Statements of Cash Flows for the 
          nine months ended September 30, 1998 and 1997 (unaudited)....   7-8
         Notes to Condensed Consolidated Financial 
          Statements (unaudited).......................................   9-10
Item 2.  Management's Discussion and Analysis of Financial Condition and 
          Results of Operations........................................   11-17

                                     PART II
                                OTHER INFORMATION


 Item 1. Legal Proceedings............................................... 18
 Item 2. Changes in Securities........................................... 18
 Item 3. Defaults Upon Senior Securities................................. 18
 Item 4. Submission of Matters to a Vote of Security Holders............. 18
 Item 5. Other Information............................................... 18
 Item 6. Exhibits and Reports on Form 8-K................................ 18-20

                           FORWARD LOOKING STATEMENTS

         This document  contains  forward-looking  statements in paragraphs that
are marked with an asterisk. Statements by the Company in press releases, public
filings,  and stockholder  reports, as well as oral public statements by Company
representatives,   also  may  contain   certain   forward-looking   information.
Forward-looking  information is subject to certain risks and uncertainties  that
could cause actual results to differ  materially from those  projected.  Without
limitation,  these risks and  uncertainties  include  economic  factors  such as
recessions,  downturns  in  customers'  business  cycles,  surplus  inventories,
inflation,  higher interest rates, and fuel price increases; the resale value of
the Company's used revenue  equipment;  the  availability  and  compensation  of
qualified  drivers and  owner-operators;  competition  from trucking,  rail, and
intermodal  competitors;  and the availability of desirable target companies and
financing  for  acquisitions.  Readers  should  review and  consider the various
disclosures made by the Company in its press releases,  stockholder reports, and
public  filings,  as well as the  factors  explained  in  greater  detail in the
Company's annual report on Form 10-K.


                                                             Page Number 2 of 21

<PAGE>



                                     PART I
                              FINANCIAL INFORMATION


                  SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                             (Dollars in thousands)

<TABLE>
<CAPTION>

                                                                                September 30,       December 31,
                                                                                     1998               1997
                                                                              ------------------ ------------------
<S>                                                                           <C>                <C>    
                                                                                 (unaudited)
                                    ASSETS
Current assets:
  Cash and cash equivalents................................................... $           1,436     $        4,082
  Receivables:
    Trade.....................................................................            15,431             11,040
    Other.....................................................................             1,831              1,261
    Recoverable income taxes..................................................                 5                  -
  Inventories.................................................................             1,348              1,064
  Deposits, primarily with insurers...........................................               305                770
  Prepaid expenses and other..................................................               912              1,160
  Deferred income taxes.......................................................               440                350
                                                                              ------------------ ------------------
         Total current assets.................................................            21,708             19,727
                                                                              ------------------ ------------------
Property and equipment:
  Land........................................................................               881                531
  Buildings and improvements..................................................             6,067              5,100
  Tractors....................................................................            54,662             38,217
  Trailers....................................................................            33,992             24,233
  Other equipment.............................................................             5,875              5,308
                                                                              ------------------ ------------------
                                                                                         101,477             73,389
  Less accumulated depreciation...............................................            24,944             20,257
                                                                              ------------------ ------------------
         Net property and equipment...........................................            76,533             53,132
                                                                              ------------------ ------------------
Other assets, net.............................................................             5,138              2,019
                                                                              ------------------ ------------------
                                                                                $        103,379      $      74,878
                                                                              ================== ==================


                                                                                                Page Number 3 of 21
</TABLE>
See accompanying notes to condensed consolidated financial statements.
 
<PAGE>



                  SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                             (Dollars in thousands)


<TABLE>
<CAPTION>
                                                                                 September 30,      December 31,
                                                                                     1998               1997
                                                                              ------------------ ------------------
                                                                                 (unaudited)
<S>                                                                           <C>                <C>    

                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Current maturities of long-term debt .......................................  $          5,730 $           3,971
  Accounts payable............................................................             4,615             2,277
  Accrued compensation........................................................             2,194             1,278
  Income taxes payables.......................................................                 -               275
  Accrued loss reserves.......................................................             1,144               905
  Other accrued expenses......................................................               349               921
                                                                                ---------------- -----------------
         Total current liabilities............................................            14,032             9,627
Long-term debt, less current maturities.......................................            45,271            27,005
Deferred income taxes.........................................................            10,238             8,340
                                                                                ---------------- -----------------
         Total liabilities....................................................            69,541            44,972
                                                                                ---------------- -----------------
Stockholders' equity:
  Preferred stock.............................................................                 -                 -
  Common stock:
    Class A...................................................................                40                40
    Class B...................................................................                10                10
  Additional paid-in capital..................................................            11,308            11,144
  Retained earnings...........................................................            22,557            18,789
  Reacquired shares, at cost..................................................               (77)              (77)
                                                                                ---------------- ------------------
         Total stockholders' equity...........................................            33,838            29,906
                                                                                ---------------- ------------------
                                                                                $        103,379 $          74,878
                                                                                ================ ==================

                                                                                                Page Number 4 of 21

</TABLE>

See accompanying notes to condensed consolidated financial statements.
<PAGE>



                  SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES

                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
             (Dollars in thousands, except share and per share data)
                                   (Unaudited)

<TABLE>
<CAPTION> 

                                                     Three months ended                   Nine months ended
                                                       September 30,                        September 30,
                                                  1998               1997              1998              1997
                                             ---------------   ----------------    -------------    ---------------
<S>                                          <C>               <C>                 <C>              <C>    

Operating revenue:
     Freight................................ $        42,203   $         31,739    $     116,259    $        89,106
     Other..................................             221                 95              391                250
                                             ---------------   ----------------    -------------    ---------------
           Operating revenue................          42,424             31,834          116,650             89,356
                                             ---------------   ----------------    -------------    ---------------
Operating expenses:
     Purchased transportation...............          17,911             12,716           48,553             35,022
     Compensation and employee benefits.....           9,679              7,082           27,464             19,943
     Fuel, supplies, and maintenance........           4,934              3,951           14,254             11,837
     Insurance and claims...................             620                585            1,940              1,599
     Taxes and licenses.....................             799                616            2,150              1,699
     General and administrative.............           1,576              1,351            4,506              4,043
     Communication and utilities............             469                343            1,311              1,037
     Depreciation and amortization..........           2,908              1,821            8,055              5,746
                                             ---------------   ----------------    -------------    ---------------
          Total operating expenses..........          38,896             28,465          108,233             80,926
                                             ---------------   ----------------    -------------    ---------------
            Earnings from operations........           3,528              3,369            8,417              8,430
Financial (expense) income
     Interest expense.......................           (831)              (507)          (2,148)            (1,286)
     Interest income........................              46                 37              181                 43
                                             ---------------   ----------------    -------------    ---------------
             Earnings before income taxes...           2,743              2,899            6,450              7,187
Income taxes................................           1,139              1,204            2,682              3,006
                                             ---------------   ----------------    -------------    ---------------
             Net earnings................... $         1,604   $          1,695    $       3,768    $         4,181
                                             ===============   ================    =============    ===============
Basic and diluted earnings per common
share....................................... $          0.32   $           0.34    $        0.75    $          0.84
                                             ===============   ================    =============    ===============
Basic weighted average common shares
outstanding.................................       5,015,082          5,001,913        5,011,523          5,000,163
     Common stock options and awards........           1,365             29,840           32,119              5,978
                                             ---------------   ----------------    -------------    ---------------
Diluted weighted average common                                               
shares outstanding..........................       5,016,447         5,031,753         5,043,642          5,006,141
                                             ===============   ================    =============    ===============




                                                                                                Page Number 5 of 21
</TABLE>
See accompanying notes to condensed consolidated financial statements.
 
<PAGE>



                  SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED STATEMENTS OF
                              STOCKHOLDERS' EQUITY
                             (Dollars in thousands)


<TABLE>
<CAPTION>

                                                           Additional                                   Total
                                               Common       paid-in      Retained     Reacquired     stockholders'
                                                stock       capital      earnings       shares         equity
                                            ------------- ------------ ------------- -------------   -------------
<S>                                         <C>           <C>          <C>           <C>             <C>    

Balance at December 31, 1996................$          50  $    11,104  $     13,116  $        (77)   $     24,193
Net earnings................................            -            -         5,673             -           5,673
Issuance of stock bonuses...................            -           40             -             -              40
                                            ------------- ------------ -------------  -------------   -------------
Balance at December 31, 1997 ...............           50       11,144        18,789           (77)         29,906
Net earnings(unaudited).....................            -            -         3,768             -           3,768
Issuance of stock bonuses(unaudited)........            -          164             -             -             164
                                            ------------- ------------ -------------  -------------   -------------
Balance at September 30,          
1998(unaudited).............................$          50  $    11,308  $     22,557  $        (77)   $     33,838
                                            ============== ============ ============= =============   =============

                                                                                                Page Number 6 of 21
</TABLE>

See accompanying notes to condensed consolidated financial statements.
                                                               

<PAGE>



                  SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                             (Dollars in thousands)


<TABLE>
<CAPTION>
                                                                                           Nine Months Ended
                                                                                             September 30,
                                                                                     ------------------------------
                                                                                         1998            1997
                                                                                     ------------   ---------------
<S>                                                                                  <C>            <C>        

Cash flows from operating activities:
  Net earnings....................................................................... $     3,768   $         4,181
                                                                                     ------------   ---------------
  Adjustments  to  reconcile  net  earnings to net cash  provided  by  operating
    activities:
    Depreciation and amortization....................................................       8,055             5,746
    Deferred income taxes............................................................       1,808             1,500
    Provision for bad debts..........................................................          37                 -
    Stock bonuses....................................................................         164                37
    Changes in:
      Receivables....................................................................      (4,998)           (4,036)
      Inventories....................................................................        (101)              (65)
      Deposits, primarily with insurers..............................................         465               186
      Prepaid expenses...............................................................         459              (886)
      Accounts payable and other accrued liabilities.................................       2,657             2,148
                                                                                     ------------   ---------------
             Total adjustments.......................................................       8,546             4,630
                                                                                     ------------   ---------------
             Net cash provided by operating activities...............................      12,314             8,811
                                                                                     ------------   ---------------

Cash flows from investing activities:
  Payments for acquisitions..........................................................     (14,255)           (2,533)
  Purchase of property and equipment.................................................     (10,295)           (4,376)
  Proceeds from the sale of property and equipment...................................       1,414             6,080
  Purchase of other assets...........................................................        (162)             (128)
                                                                                     ------------   ---------------
             Net cash used in investing activities...................................     (23,298)             (957)
                                                                                     ------------   ---------------

Cash flows from financing activities:
  Proceeds from long-term debt.......................................................      14,000            14,300
  Principal payments on long-term debt...............................................      (5,662)          (17,461)
  Borrowings on line of credit agreement.............................................           -            95,017
  Payments on line of credit agreement...............................................           -           (99,507)
                                                                                     ------------   ---------------
         Net cash provided by(used in) financing activities..........................       8,338            (7,651)
                                                                                     ------------   ---------------

         Net (decrease)increase in cash and cash equivalents.........................      (2,646)              203
Cash and cash equivalents at beginning of period.....................................       4,082               940
                                                                                     ------------   ---------------
Cash and cash equivalents at end of period........................................... $     1,436   $         1,143
                                                                                     ============   ===============

                                                                                                Page Number 7 of 21
</TABLE>
See accompanying notes to condensed consolidated financial statements.

<PAGE>



                  SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES

           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED


                                   (Unaudited)
                             (Dollars in thousands)

<TABLE>
<CAPTION>



                                                                                         Nine months ended
                                                                                           September 30,
                                                                                 ----------------------------------
                                                                                        1998             1997
                                                                                 ---------------   ----------------
<S>                                                                              <C>               <C>    
Supplemental disclosure of cash flow information:
                                                                                 
  Cash paid during the period for:
                                                                                 
      Interest...................................................................$      2,310      $       1,251
                                                                                 
      Income taxes...............................................................       1,153                543
                                                                                 ============     ==============

                                                                                 
Supplemental schedules of noncash investing and financing activities:
                                                                                 
    Notes payable issued for tractors and trailers...............................$     10,394      $      15,831
                                                                                 
    Issuance of stock bonuses....................................................         164                 37
                                                                                 
    Liability issued for intangible assets.......................................       1,293                  -
                                                                                 ============     ==============

                                                                                 

                                                                                 
Cash payments for acquisitions:
                                                                                 
    Revenue equipment........................................................... $     11,188       $      1,990
                                                                                 
    Intangible assets...........................................................        1,697                406
                                                                                 
    Other assets................................................................        1,370                137
                                                                                 -------------      -------------
Total cash paid for acquisitions................................................ $     14,255       $      2,533
                                                                                 =============      =============

                                                                                              Page Number 8 of 21

</TABLE>
See accompanying notes to condensed consolidated financial statements.
 <PAGE>



                   SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARY

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

Note 1.           Basis of Presentation

                  The condensed  consolidated  financial  statements include the
                  accounts of Smithway  Motor  Xpress  Corp.,  a Nevada  holding
                  company,  and its wholly owned  subsidiaries,  Smithway  Motor
                  Xpress,  Inc.  and  East  West  Motor  Express,   Inc.  Unless
                  otherwise indicated, the companies named in this paragraph are
                  collectively  referred to as the  "Company."  All  significant
                  intercompany balances and transactions have been eliminated in
                  consolidation.

                  The  condensed  consolidated  financial  statements  have been
                  prepared, without audit, in accordance with generally accepted
                  accounting  principles,  pursuant to the  published  rules and
                  regulations of the Securities and Exchange Commission.  In the
                  opinion of management, the accompanying condensed consolidated
                  financial   statements   include  all  adjustments  which  are
                  necessary  for a fair  presentation  of the  results  for  the
                  interim periods presented,  such adjustments being of a normal
                  recurring nature. Certain information and footnote disclosures
                  have been  condensed  or  omitted  pursuant  to such rules and
                  regulations.  The  December  31, 1997  Condensed  Consolidated
                  Balance  Sheet was derived from the audited  balance  sheet of
                  the  Company  for the year then ended.  It is  suggested  that
                  these condensed  consolidated  financial  statements and notes
                  thereto be read in conjunction with the consolidated financial
                  statements  and notes thereto  included in the Company's  Form
                  10-K  for  the  year  ended  December  31,  1997.  Results  of
                  operations in interim periods are not  necessarily  indicative
                  of results to be expected for a full year.

Note 2.           Acquisitions

                  In February 1998, the Company acquired tractors, trailers, and
                  certain other assets of East West Motor Express, Inc. of Black
                  Hawk, South Dakota. In exchange for these assets,  the Company
                  paid  approximately  $6.9  million  to  the  previous  owners,
                  assumed and repaid  approximately  $4.0  million in  equipment
                  financing  secured  by these  assets  and  agreed  to pay $2.3
                  million  in  goodwill.  East  West  Motor  Express,  Inc.  had
                  approximately $31 million in revenue during 1997.

                  In August  1998,  the Company  acquired  tractors,  trailers  
                  and certain  other  assets  of TP Transportation,Inc.of Enid,
                  Oklahoma.  In  exchange  for  the  assets,  the  Company  paid
                  $650,000   to  the   previous   owner,   assumed   and  repaid
                  approximately  $4.3 million in equipment  financing secured by
                  these  assets  and  agreed to pay  $150,000  in  goodwill.  TP
                  Transportation,  Inc. had  approximately $4 million in revenue
                  during 1997.

Note 3.           Change in Accounting Estimate

                  The Company  changed its  estimate of the useful life of tires
                  purchased  with  revenue  equipment  from  two  years  to  the
                  estimated  life  of the  underlying  revenue  equipment.  This
                  change was based on the Company's  experience  with warranties
                  and  tread   life  of  tires  and  has  been   accounted   for
                  prospectively  beginning  January 1,  1998.  The effect on net
                  earnings  and basic  and  diluted  earnings  per share was not
                  material for the 1998 periods.
                                                             Page Number 9 of 21
<PAGE>




Note 4.           Effect of New Financial Accounting Standards

                  SFAS No.130, "Reporting   Comprehensive   Income",   No.  131,
                  "Disclosures  about  Segments  of an  Enterprise  and  Related
                  Information",  and  No.  132,  "Employers'  Disclosures  about
                  Pensions and Other Postretirement  Benefits" are effective for
                  1998. The  implementation  of these standards had no impact on
                  the Company.

                  In June 1998, the Financial  Accounting Standards Board issued
                  SFAS No.  133,  "Accounting  for  Derivative  Instruments  and
                  Hedging  Activities,"  effective  for fiscal  years  beginning
                  after  June 15,  1999.  The  adoption  of SFAS No.  133 is not
                  expected  to  have  a  significant  impact  on  the  Company's
                  financial statements.

                   
                                                            Page Number 10 of 21
<PAGE>




                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS



Overview

         The Company's  fiscal year ends on December 31 of each year. Thus, this
report  discusses the third quarter and first nine months of the Company's  1998
and 1997 fiscal years, respectively.


         The Company has expanded  its  operations  substantially  over the past
three years through a combination of internal  growth and  acquisitions.  In the
quarter  ended  September  30,1998,  revenue  increased  33.3% and net  earnings
decreased  5.4%,  compared  with the same  quarter in 1997.  For the nine months
ended September 30, 1998,  revenue  increased  30.5% and net earnings  decreased
9.9% compared with the same period in 1997.

         The Company operates a tractor-trailer fleet comprised of Company-owned
vehicles  and  vehicles  obtained  under  leases from  independent  contractors.
Fluctuations  among expense  categories  may occur  primarily as a result of two
factors:  (I) the  percentage  of the  Company's  tractor  fleet being  obtained
through independent contractors, and (ii) the use of operating leases to finance
revenue  equipment.  Costs  associated  with revenue  equipment  acquired  under
operating leases or through agreements with independent contractors are expensed
as  "purchased  transportation."  For these  categories of equipment the Company
does not incur costs such as interest  and  depreciation  as it might with owned
equipment.   In  addition,  for  independent   contractors,   tractors,   driver
compensation, fuel, communications,  and certain other expenses are borne by the
independent contractors and are not incurred by the Company. Obtaining equipment
from  independent   contractors  and  under  operating  leases  reduces  capital
expenditures and on-balance sheet leverage and effectively  shifts expenses from
interest to "above the line" operating  expenses.  The fleet profile of acquired
companies  and the Company's  relative  recruiting  and  retention  success with
Company-employed  drivers and independent  contractors  will cause  fluctuations
from  time-to-time in the percentage of the Company's fleet that is owned versus
obtained from independent  contractors and under operating leases.  Accordingly,
management intends to evaluate the Company's  efficiency using pretax margin and
net margin rather than operating ratio(*).

Subsequent Event

         The Company  closed the  acquisition of certain assets of JHT, Inc. and
related  entities (the  "Sellers") on October 30, 1998. The Sellers had combined
revenue of  approximately  $24 million in 1997.  The Company paid  approximately
$2.3 million to the Sellers for the acquired assets,  repaid approximately $10.2
million in  financing  secured by the  acquired  assets,  and agreed to pay $1.5
million in goodwill.


--------
    (*)  May contain "forward-looking" statements.    
                                                            Page Number 11 of 21
<PAGE>



Results of Operations

         The following  table sets forth the percentage  relationship of certain
items to  operating  revenue for the three and nine months ended  September  30,
1998 and 1997:

<TABLE>
<CAPTION>

                                                       Three Months Ended                  Nine Months Ended
                                                          September 30,                      September 30,
                                                     1998              1997              1998            1997
                                                 -------------     ------------      ------------   ---------------
<S>                                              <C>               <C>               <C>            <C>    

Operating revenue................................       100.0%           100.0%           100.0%            100.0%
Operating expenses
  Purchased transportation.......................        42.2             39.9             41.6              39.2
  Compensation and employee benefits.............        22.8             22.2             23.5              22.3
  Fuel, supplies, and maintenance................        11.6             12.4             12.2              13.2
  Insurance and claims...........................         1.5              1.8              1.7               1.8
  Taxes and licenses.............................         1.9              1.9              1.8               1.9
  General and administrative.....................         3.7              4.2              3.9               4.5
  Communications and utilities...................         1.1              1.1              1.1               1.2
  Depreciation and amortization..................         6.9              5.7              6.9               6.4
                                                 -------------     ------------      ------------   ---------------
    Total operating expenses.....................        91.7             89.4             92.8              90.6
                                                 -------------     ------------      ------------   ---------------
Earnings from operations.........................         8.3             10.6              7.2               9.4
Interest expense (net)...........................        (1.8)            (1.5)            (1.7)             (1.4)
                                                 -------------     ------------      ------------   ---------------
Earnings before income taxes.....................         6.5              9.1              5.5               8.0
Income taxes.....................................         2.7              3.8              2.3               3.4
                                                 -------------     ------------      ------------   ---------------
Net earnings.....................................         3.8%             5.3%             3.2%              4.7%
                                                 =============     ============      ============   ===============
</TABLE>

Comparison  of three  months  ended  September  30, 1998 with three months ended
September 30, 1997

         Operating  revenue  increased  $10.6  million  (33.3%) to $42.4 million
during the 1998 quarter from $31.8  million  during the 1997  quarter.  Expanded
business  with existing  customers  and revenue from the acquired  operations of
Royal Transport in September 1997, East West Motor Express in February 1998, and
TP  Transportation  in August 1998 contributed to the Company's  revenue growth.
Weighted average tractors  increased 37.4% to 1,263 during the 1998 quarter from
919 during the 1997 quarter. This was offset by a decrease in revenue per loaded
mile to $1.33 in the 1998 quarter from $1.37 in the 1997 quarter.  This decrease
in rate per mile is a result of the increase in van freight  associated with the
acquisition of East West Motor Express.

         Purchased  transportation  increased  $5.2  million  (40.9%)  to  $17.9
million  in the 1998  quarter  from  $12.7  million  in the 1997  quarter as the
Company's  business  expanded and the Company  contracted with more  independent
contractor providers of revenue equipment. As a percentage of revenue, purchased
transportation  increased  to 42.2% of revenue in the 1998 quarter from 39.9% in
the 1997 quarter.  This reflects an increase in the  percentage of the Company's
fleet supplied by independent  contractors as a result of the Company's internal
recruiting efforts and the acquisition of East West, which has obtained a higher
percentage  of its fleet  from  independent  contractors.  It also  reflects  an
increase in the freight hauled by brokered equipment.

         Compensation  and employee  benefits  increased $2.6 million (36.7%) to
$9.7 million in the 1998 quarter  from $7.1  million in the 1997  quarter.  As a
percentage of revenue,  compensation and employee benefits increased to 22.8% of
revenue in the 1998  quarter  from 22.2% in the 1997  quarter.  The increase was
attributable  to (I) an  increase  in the  per-mile  wage  paid to van  division
drivers (ii) an increase in the number of driver  trainers and  trainees,  which
increases  compensation  expense with little  additional  revenue and,  (iii) an
increase in the amount of worker's compensation claims paid and reserved.


                                                          
                                                            Page Number 12 of 21
<PAGE>



         Fuel,  supplies,  and maintenance  increased  $983,000  (24.9%) to $4.9
million  in the  1998  quarter  from  $4.0  million  in the 1997  quarter.  As a
percentage of revenue,  fuel,  supplies,  and maintenance  decreased to 11.6% of
revenue for the 1998 quarter compared with 12.4% for the 1997 quarter reflecting
a 13%  decrease in fuel costs to $1.00  during the 1998  quarter  from $1.15 per
gallon during the 1997 quarter. The decrease was partially offset by an increase
in the cost of parts, tires, tarps,  supplies, and binders used in the Company's
tractor fleet.

         Insurance and claims  increased  $35,000 (6.0%) to $620,000 in the 1998
quarter from $585,000 in the 1997 quarter. As a percentage of revenue, insurance
and claims  decreased  to 1.5% of revenue in the 1998  quarter  from 1.8% in the
1997 period as a result of lower  liability  insurance  premiums  and  decreased
physical damage expenses.

         Taxes and licenses  increased  $183,000 (29.7%) to $799,000 in the 1998
quarter from  $616,000 in the 1997 quarter  reflecting an increase the number of
tractors licensed by the Company. As a percentage of revenue, taxes and licenses
remained constant at 1.9% of revenue.

         General and administrative  expenses increased $225,000 (16.7%) to $1.6
million  in the  1998  quarter  from  $1.4  million  in the 1997  quarter.  As a
percentage of revenue,  general and administrative expenses decreased to 3.7% of
revenue  in the 1998  quarter  from  4.2% in the 1997  quarter  as a result of a
decrease in freight revenue being  dispatched by terminal  agents,  resulting in
less  commissions  paid during the 1998 quarter.  This was partially offset by a
slight increase in advertising cost. Additionally, certain fixed costs are being
spread over a larger revenue base.

         Communications and utilities  increased $126,000 (36.7%) to $469,000 in
the 1998 quarter from $343,000 in the 1997 quarter.  As a percentage of revenue,
communications and utilities remained essentially constant at 1.1% of revenue.

         Depreciation  and  amortization  increased $1.1 million (59.7%) to $2.9
million  in the  1998  quarter  from  $1.8  million  in the 1997  quarter.  As a
percentage  of  revenue,  depreciation  and  amortization  increased  to 6.9% of
revenue  in the 1998  quarter  from 5.7% in the 1997  quarter.  The  effects  of
acquisition  goodwill and lower revenue per tractor less  efficiently  spreading
this fixed  cost more than  offset a decrease  in the  percent of the  Company's
fleet being comprised of Company-owned tractors and trailers.

         Interest  expense (net) increased  $315,000  (67.0%) to $785,000 in the
1998  quarter from  $470,000 in the 1997  quarter.  As a percentage  of revenue,
interest  expense  (net)  increased  to 1.8% of revenue in the 1998 quarter from
1.5% in the 1997 quarter,  due to higher average debt balances ($46.6 million in
the 1998 quarter  compared with $26.0 million in the 1997 quarter).  Most of the
increase in borrowing was to fund the  acquisition  of East West Motor  Express,
Inc. in February 1998, and the acquisition of TP Transportation in August 1998.

         As a result of the foregoing,  the Company's pretax margin decreased to
6.5% in the 1998 quarter from 9.1% in the 1997 quarter.

         The  Company's  effective tax rate was 41.5% for both the 1998 and 1997
quarter.  The effective  tax rate is higher than the expected  combined tax rate
for a company  headquartered in Iowa because of the cost of nondeductible driver
per diem expense absorbed by the Company. The impact of the Company's paying per
diem travel expenses  varies  depending upon the ratio of drivers to independent
contractors and the Company's net earnings.

         Primarily  as a result of the factors  described  above,  net  earnings
decreased  $91,000  (5.4%) to $1.6 million (3.8% of revenue) in the 1998 quarter
from $1.7 million (5.3% of revenue) in the 1997 quarter.
                                                            Page Number 13 of 21
<PAGE>




Comparison  of nine months  ended  September  30,  1998 with nine  months  ended
September 30, 1997

         Operating  revenue  increased  $27.3 million  (30.5%) to $116.7 million
during the 1998  period  from $89.4  million  during the 1997  period.  Expanded
business  with existing  customers  and revenue from the acquired  operations of
Royal Transport in September 1997, East West Motor Express in February 1998, and
TP  Transportation  in August 1998 contributed to the Company's  revenue growth.
Weighted average  tractors  increased 31.8% to 1,174 during the 1998 period from
891 during the 1997 period.  This was offset by a decrease in loaded revenue per
mile to $1.33 in the 1998  period  from  $1.36 per loaded  mile  during the 1997
period.  This  decrease  in rate  per mile is a result  of the  increase  in van
freight associated with the acquisition of East West Motor Express.

         Purchased  transportation  increased  $13.5  million  (38.6%)  to $48.6
million  in the  1998  period  from  $35.0  million  in the 1997  period  as the
Company's  business  expanded and the Company  contracted with more  independent
contractor providers of revenue equipment. As a percentage of revenue, purchased
transportation  increased  to 41.6% of revenue in the 1998  period from 39.2% in
the 1997 period.  This  reflects an increase in the  percentage of the Company's
fleet supplied by independent  contractors as a result of the Company's internal
recruiting efforts and the acquisition of East West, which has obtained a higher
percentage  of its fleet  from  independent  contractors.  It also  reflects  an
increase in the freight hauled by brokered equipment.

         Compensation  and employee  benefits  increased $7.5 million (37.7%) to
$27.5  million in the 1998 period from $19.9  million in the 1997  period.  As a
percentage of revenue,  compensation and employee benefits increased to 23.5% of
revenue in the 1998  period  from 22.3% in the 1997  period.  The  increase  was
attributable  to (I) an  increase  in the  per-mile  wage  paid to van  division
drivers  (ii) an increase in the number  driver  trainers  and  trainees,  which
increases compensation expense with little additional revenue until the trainees
receive  their  own  truck,  and (iii) an  increase  in the  amount of  worker's
compensation claims paid and reserved.

         Fuel, supplies, and maintenance increased $2.4 million (20.4%) to $14.3
million  in the  1998  period  from  $11.8  million  in the  1997  period.  As a
percentage of revenue,  fuel,  supplies,  and maintenance  decreased to 12.2% of
revenue for the 1998 period compared with 13.2% for the 1997 period reflecting a
12.6%  decrease  in fuel costs to $1.04 per gallon  during the 1998  period from
$1.19 per gallon during the 1997 period. The decrease was partially offset by an
increase in the cost of parts, tires, tarps,  supplies,  and binders used in the
Company's tractor fleet.

         Insurance and claims increased  $341,000 (21.3%) to $1.9 million in the
1998 period from $1.6  million in the 1997 period.  As a percentage  of revenue,
insurance  and claims  remained  essentially  constant at 1.7% of revenue in the
1998 period compared with 1.8% in the 1997 quarter.

         Taxes and licenses  increased  $451,000  (26.5%) to $2.2 million in the
1998 period  from $1.7  million in the 1997 period  reflecting  an increase  the
number of tractors  licensed by the Company.  As a percentage of revenue,  taxes
and licenses remained essentially constant at 1.8% of revenue in the 1998 period
and 1.9% in the 1997 period.

         General and administrative  expenses increased $463,000 (11.5%) to $4.5
million in the 1998 period from $4.0 million in the 1997 period. As a percentage
of revenue,  general and administrative expenses decreased to 3.9% of revenue in
the 1998  period  from 4.5% in the 1997  period  predominately  as a result of a
decrease in freight revenue being  dispatched by terminal  agents,  resulting in
less commissions paid during the 1998 period. Additionally,  certain fixed costs
are being spread over a larger revenue base.        
                                                            Page Number 14 of 21
<PAGE>



         Communications and utilities increased $274,000 (26.4%) to $1.3 million
in the 1998 period from $1.0  million in the 1997  period.  As a  percentage  of
revenue,  communications and utilities remained  essentially constant at 1.1% of
revenue in the 1998 period and 1.2% in the 1997 period.

         Depreciation  and  amortization  increased $2.3 million (40.2%) to $8.1
million in the 1998 period from $5.7 million in the 1997 period. As a percentage
of revenue,  depreciation and  amortization  increased to 6.9% of revenue in the
1998 period from 6.4% in the 1997 period.  The effects of  acquisition  goodwill
and lower revenue per tractor less  efficiently  spreading  this fixed cost more
than offset a decrease in the percent of the Company's  fleet being comprised of
Company-owned tractors and trailers.

         Interest  expense (net) increased  $724,000  (58.3%) to $2.0 million in
the 1998  period  from $1.2  million  in the 1997  period.  As a  percentage  of
revenue,  interest expense (net) increased to 1.7% of revenue in the 1998 period
from 1.4% in the 1997 period, due to higher average debt balances ($40.5 million
in the 1998 period compared with $24.1 million in the 1997 period).  Most of the
increase in borrowing was to fund the  acquisition  of East West Motor  Express,
Inc. in February 1998, and the acquisition of TP Transportation in August 1998.

         As a result of the foregoing,  the Company's pretax margin decreased to
5.5% in the 1998 period from 8.0% in the 1997 period.

         The Company's  effective tax rate was 41.6% in the 1998 period compared
with 41.8% in the 1997 period. The decrease in the effective tax rate was due to
a lower  expected  combined  tax  rate for the  operations  of East  West  Motor
Express, Inc. located in South Dakota. The effective tax rate is higher than the
expected  combined tax rate for a company  headquartered  in Iowa because of the
cost of  nondeductible  driver per diem  expense  absorbed by the  Company.  The
impact of the Company's  paying per diem travel expenses  varies  depending upon
the ratio of drivers to independent contractors and the Company's net earnings.

         Primarily  as a result of the factors  described  above,  net  earnings
decreased  $413,000  (9.9%) to $3.8 million (3.2% of revenue) in the 1998 period
from $4.2 million (4.7% of revenue) in the 1997 period.

Liquidity and Capital Resources

         The  growth  of  the  Company's   business  has  required   significant
investment in new revenue  equipment that the Company  historically has financed
with  borrowings  under   installment   notes  payable  to  commercial   lending
institutions  and equipment  manufacturers,  borrowings under a revolving credit
agreement, cash flow from operations, equipment leases from third-party lessors,
and, in 1996,  proceeds of the Company's  initial public  offering.  The Company
also has  obtained a portion of its  revenue  equipment  fleet from  independent
contractors  who own and operate the equipment,  which reduces  overall  capital
expenditure   requirements   compared   with   providing  a  fleet  of  entirely
Company-owned  equipment.  The Company's primary sources of liquidity  currently
are funds  provided by operations and borrowings  under credit  agreements  with
financial institutions and equipment manufacturers. Management believes that its
sources of  liquidity  are  adequate  to meet its  current  anticipated  working
capital  requirements,  capital  expenditures,  and other needs at least through
1999(*).

         Net cash  provided by operating  activities  was $12.3  million for the
nine  months  ended  September  30,  1998.  The  primary  sources  of cash  from
operations  were net  earnings  of $3.8  million  increased  by $8.1  million in
depreciation and  amortization,  a $2.7 million increase in accounts payable and
other accrued
--------
    (*)  May contain "forward-looking" statements.

                                                                      
                                                            Page Number 15 of 21
<PAGE>



liabilities and a $1.8 million  increase in deferred  income tax liability.  The
Company's  principal  uses of cash  from  operations  were to  service  debt and
internally finance accounts  receivable  associated with growth in the business.
Accounts  receivable  increased $5.0 million for the nine months ended September
30, 1998. The average age of the Company's accounts receivable was approximately
33.1 days for the 1998 period compared to 34 days at December 31, 1997.

         Net cash used in  investing  activities  of $23.3  million  in the 1998
period related  primarily to payments made for the acquisition of assets of East
West Motor Express and TP  Transportation,  and purchases,  sales, and trades of
revenue  equipment.  The Company  expects  capital  expenditures  (primarily for
revenue equipment and satellite  communications units), net of revenue equipment
trade-ins, to be approximately $5.3 million during the remaining three months of
1998. Such projected  capital  expenditures  are expected to be funded with cash
flow from operations, borrowings, or operating leases(*).

         Net cash provided by financing  activities of $8.3 million for the nine
months ended  September  30, 1998,  consisted  primarily of  borrowings of $14.0
million  of  principal  under  the  Company's  revolving  credit  agreement  and
repayments  of $5.7 million of principal  under the Company's  revolving  credit
agreement and other long-term debt agreements.

         The maximum amount  available under the Company's  credit  agreement at
September  30, 1998,  was $25 million,  on which the Company had an  outstanding
balance  of $22.0  million.  The  interest  rate on the  outstanding  balance is
defined in the agreement  and at September 30, 1998 was 6.86%.  At September 30,
1998,  the Company  had total  outstanding  long-term  debt  (including  current
maturities)  of  approximately  $51.0  million,  most of which was  comprised of
installment  obligations  for the purchase of revenue  equipment and  borrowings
under the Company's  unsecured  credit  agreement.  Interest  rates on this debt
range from 5.7% to 7.9%,  and the  principal  amounts  mature at  various  dates
through September 2003.

         On  October  30,  1998,  the  Company  amended  its  revolving   credit
agreement.  The maximum  available  amount was  increased to $45 million and the
agreement  was  secured  by  accounts  receivable,  inventory,  certain  revenue
equipment,  and other  assets.  The amendment  also imposed a maximum  borrowing
limit and other financial covenants. The Company used a portion of the increased
availability to fund the acquisition of certain assets of JHT.

Year 2000

         The Year 2000 issue,  common to most companies,  concerns the inability
of   information   and   noninformation   systems  to   recognize   and  process
date-sensitive information after 1999 due to the use of only the last two digits
to refer to a year. This problem could affect both information systems (software
and hardware) and other equipment that relies on microprocessors. Management has
completed a  Company-wide  evaluation  of this impact on its  computer  systems,
applications  and  other   date-sensitive   equipment.   The  Company's  primary
information  technology systems ("IT Systems") include hardware and software for
billing dispatch,  electronic data interchange,  fueling,  payroll and satellite
communications systems. These IT Systems include both Company-developed software
and  software  designed by  third-parties.  The primary IT System  designed by a
third party is the satellite tracking system,  which tracks equipment locations,
provides dispatch and routing  information and allows in-cab  communication with
drivers.  The Company  has been  informed  by this  provider  that its system is
compliant.  Another  significant IT System  provided by a third party  transmits
payroll  funds to drivers and allows  drivers to  purchase  fuel and other items
outside the Company's terminal locations.  The Company has been informed by this
provider that it expects to be compliant by June 1999.

         The IT Systems  developed by the Company have been assessed and systems
and  equipment  that  are not Year  2000  compliant  have  been  identified  and
remediation efforts are in process. Management estimates


                                        
                                                            Page Number 16 of 21
<PAGE>



that  nearly 75  percent  of known  remediation  efforts  were  completed  as of
September   30,   1998.   All  known   remediation   efforts   and   testing  of
systems/equipment are expected to be completed by June 30, 1999.

         The Company is  reviewing  its risks  associated  with  microprocessors
embedded in facilities  and equipment  ("Non-IT  Systems").  The primary  Non-IT
Systems  include  microprocessors  in  tractor  engines  and  other  components,
terminal facilities,  satellite  communication units, and telecommunications and
other office  equipment.  The  Company's  assessment  of its revenue  equipment,
satellite communications units, and office equipment Non-IT Systems has revealed
low risk of material replacement  requirements.  Such systems are relatively new
and were designed to be Year 2000 compliant. The Company is continuing to assess
its Non-IT Systems  included in its terminal  facilities,  but believes that the
risk of a service-interrupting failure in these systems is low.

         The  Company  is also in the  process of  monitoring  the  progress  of
material third parties  (shippers and suppliers) in their efforts to become Year
2000 compliant. These third parties include, but are not limited to: shippers of
freight,  manufacturers of operating  equipment,  fuel and parts suppliers,  the
U.S.  Postal Service,  financial  institutions,  and utilities.  The Company has
requested  copies of the Year  2000  plans of the  material  third  parties  and
intends to seek updates from third parties as to their performance against these
plans.

         Through September 30, 1998 the Company has spent approximately  $80,000
to  address  Year 2000  issues.  Total  costs to  address  Year 2000  issues are
currently  estimated not to exceed  $150,000 and consist  primarily of costs for
the  remediation of internal  systems and  equipment.  Funds for these costs are
expected to be provided by the operating cash flows of the Company. The majority
of the internal  system  remediation  efforts  relate to staff costs of on-staff
systems programmers, and therefore, are not incremental costs.

         The  Company's  primary risk  relating to Year 2000  compliance  is the
possibility  of service  disruption  from  third-party  suppliers  of  satellite
communication,  telephone, fueling, and financial services. The Company could be
faced  with  severe  consequences  if Year 2000  issues are not  identified  and
resolved  in a timely  manner by the  Company  and  material  third  parties.  A
worst-case  scenario  would result in the short term inability of the Company to
deliver  freight for its shippers.  This would result in lost revenues;  however
the amount would be dependent on the length and nature of the disruption,  which
cannot be predicted or  estimated.  In light of the possible  consequences,  the
Company is devoting the resources needed to address Year 2000 issues in a timely
manner.  The  progress of the  Company's  Year 2000  efforts are reported to the
audit  committee  of the board of  directors at each  quarterly  meeting.  While
management  expects a successful  resolution  of these  issues,  there can be no
guarantee that material third parties, on which the Company relies, will address
all Year 2000  issues on a timely  basis or that their  failure to  successfully
address all issues would not have an adverse effect on the Company.

         The Company is in the process of developing  contingency  plans in case
business interruptions do occur.  Management expects these plans to be completed
by June 30, 1999.





                           
                                                            Page Number 17 of 21
<PAGE>





                                     PART II
                                OTHER INFORMATION


Item 1.  Legal Proceedings.

                           No  reportable  events or material  changes  occurred
                           during the quarter for which this report is filed.

Item 2.  Changes in Securities.

                           None.

Item 3.  Defaults Upon Senior Securities.

                           None.

Item 4.  Submission of Matters to a Vote of Security Holders.

                           None.

Item 5.  Other Information.

                           None.

Item 6.  Exhibits and Reports on Form 8-K

                  (a)      Exhibits

















                                                            Page Number 18 of 21

                                                
<PAGE>





 Exhibit
  Number            Description
2.1           ++    Second Amendment to Asset Purchase Agreement dated as of 
                    December 27, 1996, among Smithway Motor Xpress, Inc., an 
                    Iowa corporation, Smithway Motor Xpress Corp., a Nevada 
                    corporation, Marquardt Transportation, Inc., a South Dakota
                    corporation, and Ralph and Lucille Marquardt.
2.2          ++++   Asset Purchase Agreement dated February 20, 1998, by and 
                    among Smithway Motor Xpress, Inc., East West Motor Express, 
                    Inc. and Darwyn and David Stebbins.
2.3        ++++++   Asset Purchase Agreement dated September 23, 1998, by
                    and among  Smithway  Motor  Xpress,  Inc.,  JHT,  Inc.,  JHT
                    LOGISTICS,  INC., Bass Brook Truck Service, Inc., and JERDON
                    TERMINAL HOLDINGS, LLC.
3.1           +     Articles of Incorporation.
4.2           +     Bylaws.
4.1           +     Articles of Incorporation.
4.2           +     Bylaws.
10.1          +     Outside Director Stock Plan dated March 1, 1995.
10.2          +     Incentive Stock Plan, adopted March 1, 1995.
10.3          +     401(k) Plan, adopted August 14, 1992, as amended.
10.4          +     Form of Agency Agreement between Smithway Motor Xpress, 
                    Inc. and its independent commission agents.
10.5          +     Memorandum of officer incentive compensation policy.
10.6          +     Form of Independent Contractor Agreement between Smithway 
                    Motor Xpress, Inc.and its independent contractor providers 
                    of tractors.
10.7          ++    Second Amendment to Asset Purchase Agreement dated as of 
                    December 27, 1996, among Smithway Motor Xpress, Inc., an 
                    Iowa corporation, Smithway Motor Xpress Corp., a Nevada 
                    corporation, Marquardt Transportation, Inc., a South Dakota
                    corporation, and Ralph and Lucille Marquardt.
10.8         +++    Credit  Agreement  dated  September  3,  1997,  between
                    Smithway  Motor Xpress Corp.,  as Guarantor,  Smithway Motor
                    Xpress, Inc., as Borrower, and LaSalle National Bank.
10.9         ++++   Asset  Purchase  Agreement  dated February 20, 1998, by
                    and among  Smithway  Motor  Xpress,  Inc.,  East West  Motor
                    Express, Inc., and Darwyn and David Stebbins.
10.10       +++++   First  Amendment  to Credit  Agreement  dated March 1,
                    1998,  between  Smithway  Motor Xpress Corp.,  as Guarantor,
                    Smithway  Motor  Xpress,  Inc.,  as  Borrower,  and  LaSalle
                    National Bank.
10.11       +++++   Second  Amendment to Credit  Agreement dated March 15,
                    1998,  between  Smithway  Motor Xpress Corp.,  as Guarantor,
                    Smithway  Motor  Xpress,  Inc.,  as  Borrower,  and  LaSalle
                    National Bank.

                                                            Page Number 19 of 21
<PAGE>



 Exhibit
  Number            Description
10.12      ++++++   Asset Purchase Agreement dated September 23, 1998, by
                    and among  Smithway  Motor  Xpress,  Inc.,  JHT,  Inc.,  JHT
                    LOGISTICS,  INC., Bass Brook Truck Service, Inc., and JERDON
                    TERMINAL HOLDINGS, LLC.
27            #     Financial Data Schedule.


                  ------------------


+             Incorporated by reference from the Company's Registration 
              Statement on Form S-1, Registration No. 33-90356, effective 
              June 27, 1996.

++            Incorporated by reference from the Company's Yearly Report on 
              Form 10-K for the fiscal year ended December 31, 1996. 
              Commission File No.  000-20793, dated March 31, 1997.

+++           Incorporated by reference from the Company's Quarterly Report on 
              Form 10-Q for the period ended September 30, 1997.  Commission 
              File No.  000-20793, dated November 12, 1997.

++++          Incorporated by reference from the Company's Form 8-K.  
              Commission File No.000-20793, dated March 12, 1998.

+++++         Incorporated by reference from the Company's Quarterly Report 
              on Form 10-Q for the period ended March 31, 1998.  
              Commission File No.  000-20793, dated May 14, 1998.

++++++        Incorporated by reference from the Company's Form 8-K.  
              Commission File No.000-20793, dated November 12, 1998.

#             Filed herewith.

              (b)  Reports on Form 8-K.

              None.
                                                            Page Number 20 of 21
                                                       
<PAGE>


                                    SIGNATURE


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

                                          SMITHWAY MOTOR XPRESS CORP.,
                                          a Nevada corporation


Date: November 12, 1998                   By:/s/Michael E. Oleson
                                                        
                                          Michael E. Oleson
                                          Treasurer and Chief Accounting Officer


                                                            Page Number 21 of 21
<PAGE>