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 June 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                                   42-1433844
  (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 (August 7, 1998).

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

                                                    Exhibit Index is on Page 16.


                                                             Page Number 1 of 19
<PAGE>

                                    PART I
                              FINANCIAL INFORMATION


                                                                          PAGE
                                                                         NUMBER
Item 1.  Financial Statements...........................................   3-9
         Condensed Consolidated Balance Sheets as of
           December 31, 1997 and June 30, 1998 (unaudited)..............   3-4
         Condensed Consolidated Statements of Earnings for the
           three and six months ended June 30, 1998 and 1997(unaudited).    5
         Condensed Consolidated Statements of Stockholders' Equity for
           the year ended December 31, 1997, and the six months
           ended June 30, 1998 (unaudited)..............................    6
         Condensed Consolidated Statements of Cash Flows for the
           six months ended June 30, 1998 and 1997 (unaudited)..........   7-8
         Notes to Condensed Consolidated Financial
           Statements (unaudited).......................................    9
Item 2.  Management's Discussion and Analysis of Financial Condition and
          Results of Operations.........................................  10-15

                                     PART II


 Item 1. Legal Proceedings...............................................    16
 Item 2. Changes in Securities...........................................    16
 Item 3. Defaults Upon Senior Securities.................................    16
 Item 4. Submission of Matters to a Vote of Security Holders.............    16
 Item 5. Other Information...............................................    16
 Item 6. Exhibits and Reports on Form 8-K...............................   16-18

                           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 19
<PAGE>

                                     PART I
                             FINANCIAL INFORMATION



                  SMITHWAY MOTOR XPRESS CORP. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                             (Dollars in thousands)

<TABLE>
<CAPTION>
                                                                                     June 30,          December 31,
                                                                                      1998                 1997
                                                                                ------------------  ------------------
                                                                                 (unaudited)
<S>                                                                             <C>                 <C>
                                    Assets
Current assets:
  Cash and cash equivalents...................................................  $          2,851    $         4,082
  Receivables:
    Trade.....................................................................            14,421             11,040
    Other.....................................................................             1,859              1,261
  Inventories.................................................................             1,247              1,064
  Deposits, primarily with insurers...........................................               268                770
  Prepaid expenses............................................................             1,501              1,160
  Deferred income taxes.......................................................               470                350
                                                                                ------------------  -------------------
         Total current assets.................................................            22,617             19,727
                                                                                ------------------  -------------------
Property and equipment:
  Land........................................................................               881                531
  Buildings and improvements..................................................             6,028              5,100
  Tractors....................................................................            46,041             38,217
  Trailers....................................................................            30,350             24,233
  Other equipment.............................................................             5,737              5,308
                                                                                ------------------  -------------------
                                                                                          89,037             73,389
  Less accumulated depreciation...............................................            24,541             20,257
                                                                                ------------------  -------------------
         Net property and equipment...........................................            64,496             53,132
                                                                                ------------------  -------------------
Other assets, net.............................................................             4,463              2,019
                                                                                ------------------  -------------------
                                                                                $         91,576    $        74,878
                                                                                ==================  ===================


                                                                                             Page Number 3 of 19
</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>
                                                                                   June 30,         December 31,
                                                                                     1998               1997
                                                                              ------------------ ------------------
                                                                                 (unaudited)
<S>                                                                           <C>                <C>

                      Liabilities and Stockholders' Equity
Current liabilities:
  Current maturities of long-term debt .......................................  $          4,463     $        3,971
  Accounts payable............................................................             4,125              2,277
  Accrued compensation .......................................................             1,640              1,278
  Income taxes payables.......................................................               225                275
  Accrued loss reserves.......................................................             1,221                905
  Other accrued expenses......................................................               340                921
                                                                              ------------------ ------------------
         Total current liabilities............................................            12,014              9,627
Long-term debt, less current maturities.......................................            37,904             27,005
Deferred income taxes.........................................................             9,425              8,340
                                                                              ------------------ ------------------
         Total liabilities....................................................            59,343             44,972
                                                                              ------------------ ------------------
Stockholders' equity:
  Preferred stock.............................................................                 -                  -
  Common stock:
    Class A...................................................................                40                 40
    Class B...................................................................                10                 10
  Additional paid-in capital..................................................            11,307             11,144
  Retained earnings...........................................................            20,953             18,789
  Reacquired shares, at cost..................................................               (77)               (77)
                                                                              ------------------ ------------------
         Total stockholders' equity...........................................            32,233             29,906
                                                                              ------------------ ------------------
                                                                                $         91,576     $       74,878
                                                                              ================== ==================


                                                                                             Page Number 4 of 19
</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                  Six months ended
                                                           June 30,                           June 30,
                                                    1998             1997              1998              1997
                                               --------------  ----------------   ---------------   ---------------
<S>                                            <C>             <C>                <C>               <C>

Operating revenue:
     Freight...................................$       40,762  $         30,486   $        74,056   $        57,367
     Other.....................................            73               128               170               155
                                               --------------  ----------------   ---------------   ---------------
           Operating revenue...................        40,835            30,614            74,226            57,522
                                               --------------  ----------------   ---------------   ---------------
Operating expenses:
     Purchased transportation..................        17,436            11,769            30,642            22,306
     Compensation and employee benefits........         9,919             6,813            17,785            12,860
     Fuel, supplies, and maintenance...........         4,976             4,053             9,320             7,886
     Insurance and claims......................           583               542             1,320             1,014
     Taxes and licenses........................           719               554             1,351             1,082
     General and administrative................         1,582             1,422             2,930             2,692
     Communication and utilities...............           429               331               842               694
     Depreciation and amortization.............         2,795             2,023             5,147             3,926
                                               --------------  ----------------   ---------------   ---------------
          Total operating expenses.............        38,439            27,507            69,337            52,460
                                               --------------  ----------------   ---------------   ---------------
          Earnings from operations.............         2,396             3,107             4,889             5,062
Financial (expense) income
     Interest expense..........................         (732)             (459)           (1,317)             (779)
     Interest income...........................            55                 2               135                 6
                                               --------------  ----------------   ---------------   ---------------
          Earnings before income taxes.........         1,719             2,650             3,707               428
Income taxes...................................           698             1,114             1,543             1,802
                                               --------------  ----------------   ---------------   ---------------
          Net earnings.........................$        1,021  $          1,536   $         2,164   $         2,487
                                               ==============  ================   ===============   ===============
Basic and diluted earnings per common
share..........................................$         0.20  $           0.31   $          0.43   $          0.50
                                               ==============  ================   ===============   ===============
Basic weighted average common shares
outstanding....................................     5,013,592         4,999,293         5,009,682         4,999,293
     Common stock options and awards...........        55,266             6,648            47,499             3,779
                                               --------------  ----------------   ---------------   ---------------
Diluted weighted average common shares              
outstanding....................................     5,068,858         5,005,941         5,057,181         5,003,072
                                               ==============  ================   ===============   ===============


                                                                                             Page Number 5 of 19
</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).....................            -            -         2,164             -           2,164
Issuance of stock bonuses(unaudited)........            -          163             -             -             163
                                            ------------- ------------ ------------- -------------  --------------
Balance at June 30, 1998(unaudited).........    $      50      $11,307       $20,953      $    (77)      $  32,233
                                            ============= ============ ============= =============  ==============


                                                                                             Page Number 6 of 19
</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>
                                                                                           Six Months Ended
                                                                                                June 30,
                                                                                     ------------------------------
                                                                                         1998            1997
                                                                                     ------------   ---------------
<S>                                                                                  <C>            <C>
Cash flows from operating activities:
  Net earnings.......................................................................$      2,164  $         2,487
                                                                                     ------------   ---------------
  Adjustments  to  reconcile  net  earnings to net cash  provided  by  operating
    activities:
    Depreciation and amortization....................................................       5,147             3,926
    Deferred income taxes............................................................         965               901
    Provision for bad debts..........................................................          22                 -
    Stock bonuses....................................................................         163                 -
    Changes in:
      Receivables....................................................................      (4,002)           (3,145)
      Inventories....................................................................         (54)              (32)
      Deposits, primarily with insurers..............................................         502                 3
      Prepaid expenses...............................................................        (159)             (402)
      Accounts payable and other accrued liabilities.................................       1,896               571
                                                                                     ------------   ---------------
             Total adjustments.......................................................       4,480             1,822
                                                                                     ------------   ---------------
             Net cash provided by operating activities...............................       6,644             4,309
                                                                                     ------------   ---------------

Cash flows from investing activities:
  Payments for acquisitions..........................................................     (11,516)           (1,421)
  Purchase of property and equipment.................................................      (3,949)           (1,026)
  Proceeds from the sale of property and equipment...................................         870               137
  Purchase of other assets...........................................................          37               (65)
                                                                                     ------------   ---------------
             Net cash used in investing activities...................................     (14,558)           (2,375)
                                                                                     ------------   ---------------

Cash flows from financing activities:
  Proceeds from long-term debt.......................................................      11,000             3,000
  Principal payments on long-term debt...............................................      (4,317)           (3,258)
  Borrowings on line of credit agreement.............................................           -            67,938
  Payments on line of credit agreement...............................................           -           (70,107)
                                                                                     ------------   ---------------
         Net cash provided by (used in) financing activities..........................      6,683            (2,427)
                                                                                     ------------   ---------------

         Net decrease in cash and cash equivalents...................................      (1,231)             (493)
Cash and cash equivalents at beginning of period.....................................       4,082               940
                                                                                     ------------   ---------------
Cash and cash equivalents at end of period........................................... $     2,851     $         447
                                                                                     ============   ===============

</TABLE>

                                                             Page Number 7 of 19

     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>

                                                                                          Six months ended
                                                                                              June 30,
                                                                                 -------------------------------
                                                                                     1998               1997
                                                                                 ------------      -------------
<S>                                                                              <C>               <C>

Supplemental disclosure of cash flow information:

  Cash paid during the period for:

      Interest................................................................. $      1,498       $         775

      Income taxes..............................................................         628                   2
                                                                                ============       =============


Supplemental schedules of noncash investing and financing 
activities:

    Notes payable issued for tractors and trailers..............................$       3,554      $       6,292

    Issuance of stock bonuses...................................................          163                  -

    Liability issued for intangible assets......................................        1,154                  -
                                                                                =============      =============


Cash payments for acquisitions:

    Revenue equipment...........................................................$       8,913      $       1,175

    Intangible assets...........................................................        1,332                171

    Other assets................................................................        1,271                 75
                                                                                -------------      -------------
Total cash paid for acquisitions................................................$      11,516      $       1,421
                                                                                =============      =============


</TABLE>
                                                             Page Number 8 of 19

     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.           Acquisition

                  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 $6,852 to the previous owners,  assumed and
                  repaid  approximately $4,017 in equipment financing secured by
                  these assets and agreed to pay $2,256 in  goodwill.  East West
                  Motor Express,  Inc. had  approximately $31 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.

Note 4.           Effect of New Financial Accounting Standards

                  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 9 of 19
<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 second  quarter and first six 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 June 30,1998,  revenue  increased 33.4% and net earnings  decreased 33.5%,
compared with the same quarter in 1997.  For the six months ended June 30, 1998,
revenue increased 29.0% and net earnings  decreased 13.0% 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(*).



--------
(*)  May contain "forward-looking" statements.


                                                           Page Number 10 of 19
<PAGE>

Results of Operations

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

<TABLE>
<CAPTION>

                                                       Three Months Ended                   Six Months Ended
                                                            June 30,                            June 30,
                                                     1998              1997              1998            1997
                                                 -------------     ------------      ------------   ---------------
<S>                                              <C>               <C>               <C>            <C>
Operating revenue................................       100.0%           100.0%            100.0%             100.0%
Operating expenses
  Purchased transportation.......................          42.7             38.4             41.3              38.8
  Compensation and employee benefits.............          24.3             22.3             24.0              22.4
  Fuel, supplies, and maintenance................          12.2             13.2             12.6              13.7
  Insurance and claims...........................           1.4              1.8              1.8               1.8
  Taxes and licenses.............................           1.8              1.8              1.8               1.9
  General and administrative.....................           3.9              4.6              3.9               4.7
  Communications and utilities...................           1.0              1.1              1.1               1.2
  Depreciation and amortization..................           6.8              6.6              6.9               6.8
                                                  -------------     ------------      ------------   ---------------
    Total operating expenses.....................          94.1             89.9             93.4              91.2
                                                  -------------     ------------      ------------   ---------------
Earnings from operations.........................           5.9             10.1              6.6               8.8
Interest expense (net)...........................          (1.7)            (1.5)            (1.6)             (1.3)
                                                  -------------     ------------      ------------   ---------------
Earnings before income taxes.....................           4.2              8.6              5.0               7.5
Income taxes.....................................           1.7              3.6              2.1               3.2
                                                  -------------     ------------      ------------   ---------------
Net earnings.....................................           2.5%             5.0%             2.9%              4.3%
                                                  =============     ============      ============   ===============
</TABLE>

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

     Operating  revenue  increased $10.2 million (33.4%) to $40.8 million during
the 1998 quarter from $30.6 million during the 1997 quarter.  Expanded  business
with  existing  customers  and revenue  from the  acquired  operations  of Royal
Transport  in  September  1997 and East West  Motor  Express  in  February  1998
contributed to the Company's revenue growth.  The increase was attributable to a
36.8% increase in weighted  average  tractors,  to 1,198 during the 1998 quarter
from 876 during the 1997  quarter.  This was offset by a decrease in revenue per
loaded mile to $1.33 in the 1998  quarter from $1.36 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 $5.7 million (48.2%) to $17.4 million in
the 1998  quarter  from  $11.8  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 42.7% of revenue in the 1998 quarter from 38.5% 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.

     Compensation and employee  benefits  increased $3.1 million (45.6%) to $9.9
million  in the  1998  quarter  from  $6.8  million  in the 1997  quarter.  As a
percentage of revenue,  compensation and employee benefits increased to 24.3% of
revenue in the 1998  quarter  from 22.3% 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  trainers  and  trainees,  (iii) an
increase in the self-insured retention for health insurance claims and

                                                            Page Number 11 of 19
<PAGE>

reserve amounts for the period,  and, (iv) an increase in the amount of worker's
compensation claims paid and reserved.

     Fuel, supplies,  and maintenance increased $923,000 (22.8%) to $5.0 million
in the 1998 quarter from $4.1 million in the 1997  quarter.  As a percentage  of
revenue,  fuel, supplies,  and maintenance decreased to 12.2% of revenue for the
1998  quarter  compared  with  13.2 % for the 1997  quarter  reflecting  a 11.9%
decrease in fuel costs to $1.04  during the 1998  quarter  from $1.18 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  $41,000  (7.6%) to  $583,000  in the 1998
quarter from $542,000 in the 1997 quarter. As a percentage of revenue, insurance
and claims  decreased  to 1.4% of revenue in the 1998  quarter  from 1.8% in the
1997 period as a result of lower liability and physical damage expenses.

     Taxes and  licenses  increased  $165,000  (29.8%) to  $719,000  in the 1998
quarter  from  $554,000 in the 1997  quarter  reflecting  an increase in Company
owned tractors. As a percentage of revenue, taxes and licenses remained constant
at 1.8% of revenue.

     General and  administrative  expenses  increased  $160,000  (11.3%) 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 3.9% of
revenue  in the 1998  quarter  from  4.6% 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 $98,000 (29.6%) to $429,000 in the
1998  quarter from  $331,000 in the 1997  quarter.  As a percentage  of revenue,
communications and utilities remained essentially constant at 1.0% of revenue in
the 1998 quarter and 1.1% in the 1997 quarter.

     Depreciation and amortization increased $772,000 (38.2%) to $2.8 million in
the 1998  quarter  from $2.0 million in the 1997  quarter.  As a  percentage  of
revenue,  depreciation and amortization increased slightly to 6.8% of revenue in
the 1998 quarter  from 6.6% in the 1997  quarter,  as lower  revenue per tractor
less  efficiently  spread this fixed cost and 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  $220,000 (48.1%) to $677,000 in the 1998
quarter from $457,000 in the 1997 quarter. As a percentage of revenue,  interest
expense (net)  increased to 1.7% of revenue in the 1998 quarter from 1.5% in the
1997 quarter,  due to higher  average debt balances  ($41.8  million in the 1998
quarter compared with $25.1 million in the 1997 quarter).

         As a result of the foregoing,  the Company's pretax margin decreased to
4.2% in the 1998 quarter from 8.6% in the 1997 quarter.


     The  Company's  effective  tax rate was 40.6% in the 1998 quarter  compared
with 42.0% in the 1997  quarter.  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.

                                                            Page Number 12 of 19
<PAGE>

     Primarily  as a  result  of  the  factors  described  above,  net  earnings
decreased $515,000 (33.5%) to $1.0 million (2.5% of revenue) in the 1998 quarter
from $1.5 million (5.0% of revenue) in the 1997 quarter.

Comparison of six months ended June 30, 1998 with six months ended June 30, 1997

     Operating  revenue  increased $16.7 million (29.0%) to $74.2 million during
the 1998 period from $57.5  million  during the 1997 period.  Expanded  business
with  existing  customers  and revenue  from the  acquired  operations  of Royal
Transport  in September  1997 and East West Motor  Express on February 27, 1998,
contributed to the Company's  revenue growth.  The increase was  attributable to
(i) a 5.1% increase in revenue equipment utilization as the average billed miles
per  tractor  per week  increased  to 1,752  miles in the 1998 period from 1,667
miles  in the  1997  period;  and  (ii) a 28.9%  increase  in  weighted  average
tractors,  to 1,129 during the 1998 period from 876 during the 1997 period which
was offset by a decrease in loaded  revenue per mile to $1.34 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 $8.3 million (37.4%) to $30.6 million in
the 1998 period from $22.3 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 41.3% of revenue in the 1998 period from 38.8% 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 $4.9 million (38.3%) to $17.8
million  in the  1998  period  from  $12.9  million  in the  1997  period.  As a
percentage of revenue,  compensation and employee benefits increased to 24.0% of
revenue in the 1998  period  from 22.4% 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 of  trainers  and  trainees,  (iii) an
increase in the  self-insured  retention for health insurance claims and reserve
amounts  for the  period,  and,  (iv) an  increase  in the  amount  of  worker's
compensation claims paid and reserved.

     Fuel,  supplies,  and  maintenance  increased $1.4 million  (18.2%) to $9.3
million in the 1998 period from $7.9 million in the 1997 period. As a percentage
of revenue,  fuel, supplies,  and maintenance  decreased to 12.6% of revenue for
the 1998  period  compared  with 13.7% for the 1997  period  reflecting  a 13.2%
decrease in fuel costs to $1.05 per gallon during the 1998 period from $1.21 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 $306,000 (30.2%) to $1.3 million in the 1998
period  from $1.0  million  in the 1997  period.  As a  percentage  of  revenue,
insurance and claims remained constant at 1.8% of revenue.

     Taxes and licenses  increased  $269,000 (24.9%) to $1.4 million in the 1998
period from $1.1 million in the 1997 period.  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.

                                                            Page Number 13 of 19

<PAGE>

    General  and  administrative  expenses  increased  $238,000  (8.8%)  to $2.9
million in the 1998 period from $2.7 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 4.7% 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.

     Communications and utilities  increased $148,000 (21.3%) to $842,000 in the
1998  period from  $694,000  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  $1.2  million  (31.1%)  to $5.1
million in the 1998 period from $3.9 million in the 1997 period. As a percentage
of revenue,  depreciation and amortization remained essentially constant at 6.9%
of revenue in the 1998 period and 6.8% in the 1997 period.

     Interest expense (net) increased $409,000 (52.9%) to $1,182,000 in the 1998
period from $773,000 in the 1997 period.  As a percentage  of revenue,  interest
expense  (net)  increased to 1.6% of revenue in the 1998 period from 1.3% in the
1997 period,  due to higher  average debt  balances  ($37.3  million in the 1998
period compared with $25.2 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.

     As a result of the foregoing, the Company's pretax margin decreased to 5.0%
in the 1998 period from 7.5% in the 1997 period.

     The Company's effective tax rate was 41.6% in the 1998 period compared with
42.0% 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  $323,000  (13.0%) to $2,164,000  (2.9% of revenue) in the 1998 period
from $2,487,000 (4.3% 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 $25 million unsecured 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 1998(*).


--------
(*) May contain "forward-looking" statements.

                                                               Page No. 14 of 19
<PAGE>


     Net cash  provided by  operating  activities  was $6.6  million for the six
months ended June 30, 1998. The primary sources of cash from operations were net
earnings  of  $2.2  million  increased  by  $5.1  million  in  depreciation  and
amortization,  a $1.9  million  increase in accounts  payable and other  accrued
liabilities and a $1.0 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  $4.0  million for the six months ended June 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 $14.6 million in the 1998 period
related  primarily to payments made for the  acquisition  of assets of East West
Motor  Express,  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  $8.5  million  during  the  remaining  six  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 $6.7  million for the six
months ended June 30, 1998,  consisted  primarily of borrowings of $11.0 million
of principal  under the  Company's  long-term  unsecured  credit  agreement  and
repayments of $4.3 million of principal under the Company's  long-term unsecured
credit agreement and other long-term debt agreements.

     The maximum amount available under the Company's unsecured credit agreement
at June 30,  1998,  was $25  million,  on which the Company  had an  outstanding
balance  of $19.0  million.  The  interest  rate on the  outstanding  balance is
defined in the agreement and at June 30, 1998 was 6.6875%. At June 30,1998,  the
Company had total outstanding  long-term debt (including current  maturities) of
approximately  $42.4  million,  most  of  which  was  comprised  of  installment
obligations  for the  purchase of revenue  equipment  and  borrowings  under the
Companys unsecured credit agreement. Interest rates on this debt range from 5.7%
to 7.9%,  and the principal  amounts  mature at various  dates through  December
2002.

Year 2000

     The Company has identified  fifteen Year 2000 issues,  and has successfully
written  and  tested  programs  to deal  with  eleven  of  these  issues.  It is
anticipated  that programs  addressing the remaining  issues will be written and
tested by the end of 1998.  All  programs  are  expected to be fully  tested and
problems  resolved  by June 30,  1999.  The  Company  has  sent a survey  to all
significant  customers and vendors requesting written assurance related to their
Year 2000  compliance.  As of June 30, 1998, the Company has received  responses
from 25% of these surveys,  all of which indicate expected third party Year 2000
readiness.  Management  expects the Year 2000 issues to have a minimal impact on
the Company's results of operations, liquidity, and capital resources (*).





--------
*May contain "forward-looking" statements.


                                                            Page Number 15 of 19
<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.

         The Annual Meeting of  Stockholders  of Smithway Motor Xpress Corp. was
         held  on May 8,  1998,  for  the  purpose  of (a)  ratification  of the
         selection  of KPMG Peat  Marwick LLP as  independent  certified  public
         accountants  for  the  Company  and (b)  electing  five  directors  for
         one-year  terms.  Proxies for the meeting  were  solicited  pursuant to
         Section 14(a) of the Securities  Exchange Act of 1934, and there was no
         solicitation   in  opposition  to   management's   nominees.   Each  of
         management's nominees for director as listed in the Proxy Statement was
         elected.  The voting  tabulation  on the selection of  accountants  was
         3,467,874  shares  "FOR",  75  shares   "AGAINST",   and  4,004  shares
         "ABSTAIN."  The voting  tabulation  on the election of directors was as
         follows:

                                                Shares       Shares
                                                Voted        Voted
                                                "FOR"      "ABSTAIN"

           William G. Smith                   5,463,903        8,050
           G. Larry Owens                     5,455,690       16,263
           Terry G. Christenberry             5,461,433       10,520
           Herbert D. Ihle                    5,464,103        7,850
           Robert E. Rich                     5,464,003        7,950

Item 5.  Other Information.

         None.

Item 6.  Exhibits and Reports on Form 8-K

         (a)      Exhibits



                                                            Page Number 16 of 19

<PAGE>


Exhibit
Number       Description
2.1        * Asset  Purchase  Agreement  dated October 4, 1996,  among  Smithway
             Motor Xpress, Inc., an Iowa corporation, Smithway Motor Xpress 
             Corp., a Nevada corporation,  Marquart Transportation,  Inc., a 
             South Dakota corporation, and Ralph and Lucille Marquardt.
2.2        * First  Amendment to Asset Purchase  Agreement dated as of October
             24, 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.
2.3        * 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.
2.4        ^ Asset Purchase Agreement dated February 20, 1998, by and among 
             Smithway Motor Xpress, Inc., East West Motor Express, Inc. 
             and Darwyn and David Stebbins.
3.1        + Articles of Incorporation.
3.2        + 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       * Asset Purchase  Agreement  dated October 4, 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       * First  Amendment to Asset Purchase  Agreement dated as of October
             24, 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.
10.9       * 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.

                                                            Page Number 17 of 19

<PAGE>

Exhibit
Number       Description
10.10      = Credit Agreement dated September 3, 1997,  between Smithway Motor
             Xpress  Corp.,  as  Guarantor,  Smithway  Motor  Xpress,  Inc.,  as
             Borrower, and LaSalle National Bank.
10.11      ^ Asset  Purchase  Agreement  dated February 20, 1998, by and among
             Smithway Motor Xpress,  Inc.,  East West Motor  Express,  Inc., and
             Darwyn and David Stebbins.
10.12      < 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.
10.13      < 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.
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.

#        Filed herewith.

         (b)      Reports on Form 8-K.

                  None.

                                                            Page Number 18 of 19
<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



                                          By:      /s/ Michael E. Oleson
Date: August 11, 1998                     Michael E. Oleson
                                          Treasurer and Chief Accounting Officer
     
                                        


                                                            Page Number 19 of 19