FORM 10-Q

                  SECURITIES AND EXCHANGE COMMISSION
                       Washington, D. C.  20549

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

For the quarterly period ended March 31, 1997
                                 OR
[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ to ________________

Commission File Number 1-06124

                      LONE STAR INDUSTRIES, INC.
        (Exact name of registrant as specified in its charter)
                                 	
			   DELAWARE    				  No. 13-0982660
         (State or other jurisdiction of		 (I.R.S. Employer
	    incorporation or organization) 		Identification No.)

 300 First Stamford Place, P. O. Box 120014, Stamford, CT  06912-0014
        (Address of principal executive offices)    (Zip Code)

Registrant's telephone number, including area code   203-969-8600

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 such filing requirements for the past 90 
days.

                   Yes   X             No       

Indicate by check mark whether the registrant has filed all documents 
and reports required to be filed by Sections 12, 13 or 15(d) of the 
Securities Exchange Act of 1934 subsequent to the distribution of 
securities under a plan confirmed by a court.

                   Yes   X             No       

The number of shares outstanding of each of the registrant's classes 
of common stock as of May 5, 1997:

       Common Stock, par value $1 per share - 10,994,100 shares
 



 

 






TABLE OF CONTENTS


	
												PAGE


PART I.	FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS
Consolidated Statements of Operations - For the
   Three Months Ended March 31, 1997 and 1996 
  (Unaudited)...........................................3

Consolidated Statements of Retained Earnings -            
   For the Three Months Ended March 31, 1997 and 
   1996 Unaudited)......................................4 

Consolidated Balance Sheets - March 31, 1997
   (Unaudited) and December 31, 1996....................5

Consolidated Statements of Cash Flows - For the 
   Three Months Ended March 31, 1997 and 1996
  (Unaudited)...........................................6

Notes to Unaudited Consolidated Financial Statements....7

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
FINANCIAL CONDITION AND RESULTS OF OPERATIONS..........13

PART II.	OTHER INFORMATION......................................18

SIGNATURES........................................................19









PART I.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

LONE STAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In Thousands Except Per Share Amounts)


                                     
                                      For the Three Months               
                                      Ended March 31,                 
                                                      1997              1996    
                                                       
                                                              
Consolidated Income                                            
Revenues:                                                     
                                                              
 Net sales                                          $ 60,836         $ 52,987
 Joint venture income                                    742              530
 Other income, net                                       674            1,563
                                                      62,252           55,080
                                                              
Deductions from revenues:                                     
 Cost of sales                                        46,183           44,941
 Selling, general and administrative expenses          7,704            7,211
 Depreciation and depletion                            6,253            5,944
 Interest expense                                      1,714            1,874 
                                                      61,854           59,970
                                                               
Income (loss) before income taxes                        398          ( 4,890) 

(Provision) credit for income taxes                     (134)           1,614
                                                                
Net income (loss) applicable to common stock        $    264         $( 3,276)  
                                                              
Weighted average common shares outstanding            10,853           11,475
                                                              
Primary and fully diluted income (loss) per common  $   0.02         $(  0.29)
  share                                                                       

The accompanying Notes to Unaudited Consolidated Financial Statements are an 
integral part of the Financial Statements.



















LONE STAR INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS(Unaudited)
(In Thousands)




                                           For the Three Months             
                                            Ended March 31,                  
                                                       1997             1996  
                                                       
                                                               
Retained earnings, beginning of period             $  115,228      $   63,315
                                                                   
Net income(loss)                                          264          (3,276)
                                                               
Dividends                                                (547)           (574)
                                                               
Retained earnings, end of period                   $  114,945      $   59,465 


   

The accompanying Notes to Unaudited Consolidated Financial Statements are an 
integral part of the Financial Statements. 












LONE STAR INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands)


                                                      March 31,   December 31,
                                                        1997          1996   
                                                     (Unaudited)   
Assets:                                                          
   Current assets:                                                
    Cash including cash equivalents of $91,934                  
     and $69,768                                     $   92,469    $   71,215
    Accounts and notes receivable, net                   33,691        33,336
    Inventories:                                                 
      Finished goods                                     26,552        24,913
      Work in process and raw materials                   8,901         5,347
      Supplies and fuel                                  22,670        23,609
                                                         58,123        53,869
    
    Deferred tax asset                                    3,611         3,611 
    Other current assets                                  3,887         3,183
      Total current assets                              191,781       165,214 
                                                                 
   Joint ventures                                        19,747        19,505
                                                                 
   Property, plant and equipment                        381,764       383,974
   Less accumulated depreciation and depletion           63,588        60,992
                                                        318,176       322,982
    
   Deferred tax asset                                    49,573        47,365 
   Other assets and deferred charges                      7,214         7,085
      Total assets                                   $  586,491    $  562,151   
                                                                 
                                                                 
Liabilities and Shareholders' Equity:                         
   Current Liabilities:                                        
    Accounts payable                                 $   13,261    $   12,562
    Accrued liabilities                                  40,406        44,238
    Senior notes payable                                 50,000        28,000 	 
    Other current liabilities                             3,415         3,436
      Total current liabilities                         107,082        88,236
                                                                 
 
   Senior notes payable                                  50,000        50,000
   Postretirement benefits other than pensions          132,059       132,219
   Other liabilities                                     26,643        27,414
   Contingencies (See Notes 8 and 9) 		      		                

      Total liabilities                                 315,784       297,869

Shareholders' Equity:                                            
  Common stock                                           12,088        12,087
  Warrants to purchase common stock                      15,571        15,574
  Additional paid-in capital                            161,905       163,664
  Retained earnings                                     114,945       115,228 
  Treasury stock, at cost                               (33,802)      (42,271)
                                                        270,707       264,282
      Total liabilities and shareholders' equity     $  586,491    $  562,151
                                                                
                           
The accompanying Notes to Unaudited Consolidated Financial Statements are an 
integral part of the Financial Statements. 













































LONE STAR INDUSTRIES, INC. 
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In Thousands)


                                      For the Three Months               
                                       Ended March 31,                  
                                                    1997              1996   
                                                
                                                               
Cash Flows from Operating Activities:                          
                                                               
Net income (loss)                                  $      264        $ (3,276)
Adjustments to arrive at net cash used by                      
 operating activities:                                         
  Depreciation and depletion                            6,253           5,944 
  Deferred income taxes                                   134          (1,614)
  Changes in operating assets and liabilities:                 
    Accounts and notes receivable                       1,431           6,160   
    Inventories and other current assets               (7,311)        (10,743)
    Accounts payable and accrued liabilities           (4,305)           (598)
  Equity income, net of dividends received               (242)            970 
  Pension funding less than(in excess of)
   expense                                                428          (1,556)
  Other, net                                             (577)            305 
Net cash used by operating activities                  (3,925)         (4,408)
                                                               
Cash Flows from Investing Activities:                          
                                                                
Capital expenditures                                  (10,080)         (9,533)
Proceeds from sale of assets                            9,448             104
Net cash used by investing activities                    (632)         (9,429)
                                                               
Cash Flows from Financing Activities: 
                         
Proceeds from issuance of long-term senior notes       50,000              - 
Redemption of long-term senior notes                  (28,000)             - 
Proceeds from exercise of warrants                         16              6
Purchase of treasury stock                                 -            (979)
Dividends paid                                           (547)          (574)
Proceeds from exercise of options                       4,342             -  
Net cash provided (used) by financing activities       25,811         (1,547)
                                                                 
Net increase (decrease)in cash and cash 
 equivalents                                           21,254        (15,384)
                                                               
Cash and cash equivalents, beginning of period         71,215         50,049 
Cash and cash equivalents, end of period           $   92,469     $   34,665 
                                                                                

The accompanying Notes to Unaudited Consolidated Financial Statements are an 
integral part of the Financial Statements. 






	NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


Note 1

In the opinion of management, the accompanying unaudited consolidated 
financial statements contain all adjustments necessary to present fairly 
the financial position of the Company as of March 31, 1997, and the 
results of operations and the cash flows for the three months ended March 
31, 1997 and 1996. 

The year-end consolidated balance sheet was derived from the Company's 
audited financial statements, but does not include all disclosures 
required by generally accepted accounting principles.  The financial 
statements contained herein should be read in conjunction with the 
financial statements and related notes in the Company's annual report on 
Form 10-K for the year ended December 31, 1996. The Company's operations 
are seasonal and, consequently, interim results are not indicative of the 
results to be expected for a full year.


Note 2 - Common Stock 

In February 1997, the Board of Directors declared a $0.05 dividend per 
common share, which was paid on March 14, 1997 to shareholders of record 
as of March 1, 1997.  During the first quarter of 1997, 275,000 employee 
stock options were exercised for a total of $4,342,000.


Note 3 - Supplemental Disclosures of Cash Flow Information

Cash equivalents include the Company's marketable securities which are 
comprised of short-term, highly liquid investments with original 
maturities of three months or less.  Interest paid during the three 
months ended March 31, 1997 and 1996 was $4,271,000 and $3,932,000, 
respectively.  Income taxes paid during the three months ended March 31, 
1997 and 1996, were $23,000 and $229,000, respectively.


Note 4 - Interest

Interest expense of $1,926,000 and $1,982,000 has been accrued for the 
three months ended March 31, 1997 and 1996, respectively. Interest 
capitalized during the three months ended March 31, 1997 and 1996, was 
$212,000 and $108,000, respectively.


Note 5 - Earnings Per Share

Due to the Company having outstanding common stock equivalents in excess 
of 20% of the number of shares of outstanding common stock, primary and 
fully diluted earnings per share of the Company are calculated using the 
modified treasury stock method in accordance with Accounting Principles 
Board Opinion No. 15, "Earnings per Share", except when primary and fully 
diluted earnings per share are anti-dilutive.  Primary earnings per share 
for the three months ended March 31, 1997 and 1996 were calculated based 
on adjusted weighted average shares outstanding of 13,093,716 and 
11,475,043, and net income of $264,000 and net loss of $3,276,000, 
respectively.

In March 1997, the Financial Accounting Standards Board issued Statement 
of Financial Accounting Standards No.128, "Earnings Per Share" ("SFAS 
No.128"). This statement establishes new standards for computing and 
presenting earnings per share ("EPS").  SFAS 128 is effective for 
financial statements issued for periods ending after December 15, 1997, 
including interim periods, and earlier application is not permitted.  
When adopted, the Company will be required to restate its EPS data for 
all prior periods presented.  The Company expects the impact of the 
adoption of this statement will have no impact on reported EPS for the 
first quarter of 1997 or 1996 but will increase previously reported 
annual EPS amounts.


Note 6 - Sale of Assets

In March 1997, the Company sold its central Illinois ready-mixed and 
other concrete operations, including inventories, for about $10,500,000 
which approximated book value.  The total proceeds included a note 
receivable for $1,650,000. 


Note 7 - Senior Notes Payable

In March 1997, the Company redeemed $28,000,000 of its 10% senior notes 
and called for the early redemption of the remaining $50,000,000 in the 
second quarter of 1997.  In March 1997, the Company issued $50,000,000 of 
7.31% senior notes due 2007.  On April 21, 1997, the remaining 
$50,000,000 of the 10% senior notes were redeemed at par plus accrued 
interest of $1,125,000.


Note 8 - Environmental Matters    

The Company is subject to extensive, stringent and complex federal, state 
and local laws, regulations and ordinances pertaining to the quality and 
the protection of the environment and human health and safety, requiring 
the Company to devote substantial time and resources in an effort to 
maintain continued compliance.  Many of the laws and regulations apply to 
the Company's former activities, properties and facilities as well as its 
current operations.  Changes to such regulations or the enactment of new 
regulations in the future could require the Company to undertake capital 
improvement projects or to cease or curtail certain current operations or 
could otherwise substantially increase the capital, operating and other 
costs associated with compliance.  Moreover, there can be no assurances 
that judicial or administrative proceedings, seeking penalties or 
injunctive relief, will not be brought against the Company for alleged 
non-compliance with applicable environmental laws and regulations 
relating to matters as to which the Company is currently unaware.  For 
instance, if releases of hazardous substances are discovered to have 
occurred at facilities currently or previously owned or operated by the 
Company, or at facilities to which the Company has sent waste materials, 
the Company may be subject to liability for the investigation and 
remediation of such sites.

The Clean Air Act was amended in 1990 to provide for a uniform federal 
regulatory scheme governing control of air pollutant emissions and permit 
requirements.  In addition, certain states in which the Company operates 
have enacted laws and regulations governing the emission of air 
pollutants and requiring permits for sources of air pollutants.  As a 
result of the 1990 amendments to the Clean Air Act, the Company is 
required to apply for federal operating permits for each of its cement 
manufacturing facilities at various dates through 1999.  As part of the 
permitting process, the Company may be required to install equipment to 
monitor emissions of air pollutants from its facilities.  In addition, 
the Clean Air Act amendments require the United States Environmental 
Protection Agency ("EPA") to develop regulations directed at reducing 
emissions of toxic air pollutants from a variety of industrial sources, 
including the portland cement manufacturing industry.  As part of this 
process, the EPA will identify maximum available control technology 
("MACT") for the reduction of emissions of air toxics from cement 
manufacturing facilities.  On April 22, 1997, the EPA announced new 
proposed MACT standards for those cement manufacturing facilities (like 
Lone Star's Greencastle and Cape Girardeau plants) that burn hazardous 
waste fuels ("HWF").  These standards are in some respects more, and in 
some less, restrictive than the MACT standards proposed in 1996.  They 
are subject to public comment and are not anticipated by the Company to 
be effective prior to early 1998 and thereafter will be implemented over 
a three-year period.  They are extremely lengthy and complex and, 
depending on their terms when they become effective, could have the 
effect of limiting or eliminating the use of HWF at one or both 
facilities.  The Company anticipates that standards for facilities 
burning fossil fuels will be initially proposed in the third quarter of 
1997.

The Resource Conservation and Recovery Act ("RCRA") establishes a 
cradle-to-grave regulatory scheme governing the generation, treatment, 
storage, handling, transportation and disposal of solid wastes.  Solid 
wastes which are classified as hazardous wastes pursuant to RCRA, as well 
as facilities that treat, store or dispose of such hazardous wastes, are 
subject to stringent regulatory requirements.  Generally, wastes produced 
by the Company's operations are not classified as hazardous wastes and 
are subject to less stringent federal and state regulatory requirements. 
Cement kiln dust ("CKD"), a by-product of cement manufacturing, is 
currently exempted from regulation as a hazardous waste pursuant to the 
Bevill Amendment to RCRA.  However, on January 31, 1995, the EPA issued a 
regulatory determination regarding the need for regulatory controls on 
the management, handling and disposal of CKD.  Generally, the EPA 
regulatory determination provides that the EPA intends to draft and 
promulgate regulations imposing controls on the management, handling and 
disposal of CKD that will be based largely on selected components of the 
existing RCRA hazardous waste regulatory program, tailored to address the 
specific regulatory concerns posed by CKD.  The EPA regulatory 
determination further provides that new CKD regulations will be designed 
both to be protective of the environment and to minimize the burden on 
cement manufacturers.  While it is not possible to predict at this time 
precisely what new regulatory controls on the management, handling and 
disposal of CKD or what increased costs (or range of costs) would be 
incurred by the Company to comply with these requirements, the EPA 
announced in 1996 that regulations will be promulgated through a 
rulemaking scheduled to be completed in late 1997, and that, thereafter, 
these rules would become effective in 1998 and thereafter will be 
implemented over a three-year period.  The types of controls being 
considered by the EPA include fugitive dust emission controls, 
restrictions for landfills located in sensitive areas, groundwater 
monitoring, standards for liners and caps, metals limits and corrective 
action for currently active units.

In 1995, the State of Indiana made a determination that the CKD stored at 
the Company's Greencastle plant is a Type I waste and requested that the 
Company apply for a formal permit for an on-site landfill for the CKD. 
The Company understands that similar notices were sent to other cement 
manufacturers in the State of Indiana.  The Company is protesting this 
determination through legal channels and has received a stay to allow it 
to demonstrate that current management practices pose no threat to the 
environment.  The Company believes that the State's determination 
ultimately will be reversed or the Company will receive the needed permit 
or other adequate relief, such as an agreed order requiring certain 
additional waste management procedures that are less stringent than those 
generally required for Type I wastes.  If the Company is not successful 
in this regard, however, like other Indiana cement producers, the 
Greencastle plant could incur substantially increased operating and 
capital costs.

The Cape Girardeau, Missouri and Greencastle, Indiana plants, which are 
the Company's two cement manufacturing facilities using HWF as a cost 
saving energy source, are subject to strict federal, state and local 
requirements governing hazardous waste treatment, storage and disposal 
facilities, including those contained in the federal Boiler and 
Industrial Furnace Regulations promulgated under RCRA (the "BIF Rules"). 
These facilities qualified for and operate under interim status pursuant 
to RCRA and the BIF Rules.  While Lone Star believes that it is currently 
in compliance with the extensive and complex technical requirements of 
the BIF Rules, in the past Lone Star has been involved in certain 
environmental enforcement proceedings seeking civil penalties and 
injunctive relief for past non-compliance, and there can be no assurances 
that the Company will be able to maintain compliance with the BIF Rules 
or that changes to such rules or their interpretation by the relevant 
agencies or courts might not make it more difficult or cost-prohibitive 
to continue to burn HWF.

The Company is currently engaged in the process of securing the permit 
required under RCRA and the BIF Rules for the Cape Girardeau plant.  The 
Company anticipates that the Greencastle plant also will go through this 
permitting process in 1997.  These permits are a requirement to enable 
Lone Star to continue the use of HWF at those facilities.  The permitting 
process is lengthy and complex, involving the submission of extensive 
technical data.  There can be no assurances that the Company will be 
successful in securing a final RCRA permit for either or both of its HWF 
facilities.  In addition, if received, the permits could contain terms 
and conditions with which the Company cannot comply or could require the 
Company to install and operate costly control technology equipment.

The federal Comprehensive Environmental Response, Compensation and 
Liability Act ("CERCLA" or "Superfund"), as well as many comparable state 
statutes, creates a joint and several liability scheme for the 
investigation and remediation of facilities where releases of hazardous 
substances are found to have occurred.  Liability may be imposed upon 
current owners and operators of the facility, upon owners and operators 
of the facility at the time of the release and upon generators and 
transporters of hazardous substances released at the facility.  While, as 
noted above, wastes produced by the Company generally are not classified 
as hazardous wastes, many of the raw materials, by-products and wastes 
currently and previously produced, used or disposed of by the Company or 
its predecessors contain chemical elements or components that have been 
designated as hazardous substances or which otherwise may cause 
environmental contamination.  Hazardous substances are or have been used 
or produced by the Company in connection with its cement manufacturing 
operations (e.g.  grinding compounds, refractory bricks), quarrying 
operations (e.g.  blasting materials), equipment operation and 
maintenance (e.g.  lubricants, solvents, grinding aids, cleaning aids, 
used oils), and hazardous waste fuel burning operations.  Past operations 
of the Company have resulted in releases of hazardous substances at sites 
currently or formerly owned by the Company and certain of its 
subsidiaries or where waste materials generated by the Company have been 
disposed.  CKD and other materials were placed in depleted quarries and 
other locations for many years.  The Company has been named by the EPA as 
a potentially responsible party for the investigation and remediation of 
several Superfund sites.  Available factual information indicates that 
the Company's disposal of waste at these Superfund sites (other than 
sites that have been remediated or as to which the Company has entered 
into settlement agreements with the EPA) was small or non-existent, and 
the Company may have certain defenses arising out of its reorganization. 
 The Company has received a letter from EPA Region 4 reasserting a claim 
for approximately $830,000 of oversight costs and accrued interest 
associated with the Company's cleanup of the site of a former 
woodtreating operation in Dania, Florida.  The Company is contesting this 
claim.  The Company is also reviewing certain of its inactive properties 
to determine if any remedial action may be required at these sites.


Note 9 -  Litigation

From time to time the Company is named as a defendant in lawsuits 
asserting product liability for which the Company maintains insurance 
coverage.  In this regard, the Company is one of many defendants, 
including several cement manufacturers, named in two product liability 
lawsuits in southern Texas that allege that cement is an unreasonably 
dangerous product that has injured a large number of plaintiffs.  The 
Company believes this type of litigation is totally without merit and 
plans to contest the lawsuits vigorously.  The Company has also been 
named in a lawsuit asserting that it has successor liability for certain 
defunct subsidiaries which allegedly manufactured faulty prestressed 
"double tees" resulting in property damage to a retail store (and 
consequent loss of business) in south Florida during Hurricane Andrew in 
1992.  In late 1995, an office building in Boston, Massachusetts, 
constructed in 1983 using concrete pilings produced by San-Vel Concrete 
Corporation, an inactive Lone Star subsidiary ("San-Vel"), was demolished 
by order of the City of Boston based upon an engineering report that the 
pilings were unreliable. In March 1997, the owner of the demolished 
building brought suit against San-Vel and the Company alleging, among 
other things, that San-Vel was negligent in producing, and that it 
breached representations relating to, the pilings.  At the request of the 
City of Boston, San-Vel has provided a list of the approximate 
twenty-five other buildings built in that City between 1980 and 1990 
using San-Vel pilings.  The City has reportedly inspected these buildings 
visually, without noting any apparent piling failure.  Engineering 
studies also have reportedly been conducted, and the Company has not 
received the results of these studies.  The Company believes that the 
cement component of the concrete used to produce the pilings in certain 
of these buildings, including the demolished building, was produced by it 
at one of its formerly owned cement plants.  There has been no indication 
that the cement was defective.  The Company plans to contest this lawsuit 
vigorously, and believes that it has good defenses to the lawsuit, 
however the litigation is at a very preliminary stage, and no assurances 
as to its ultimate outcome can be given.  All of these matters are being 
defended by the Company's insurers.


 



 

 







ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF
		FINANCIAL CONDITION AND RESULTS OF OPERATIONS.


Financial Condition

	The Company believes that cash and marketable securities on 
hand of $92.5 million and funds generated by operations will be 
adequate to cover current working capital and capital expenditure 
needs. 

	In March 1997, the Company sold its two ready-mixed and other 
concrete operations in Illinois for about $10.5 million, which 
approximated book value.
	
	On March 12, 1997, the Company redeemed $28.0 million of its 
$78.0 million 10% senior notes.  The notes were paid from cash on 
hand. In addition, the Company entered into a long-term private 
placement agreement for $50.0 million of 7.31% senior notes due 
2007. On April 21, 1997, the Company redeemed the balance of the 
10% senior notes at par plus accrued interest of approximately 
$1.1 million. 

	In March 1997, the Company canceled its $35.0 million 
revolving credit agreement and is currently in negotiations to 
replace the agreement with a new unsecured revolving credit 
facility which will allow the Company to borrow funds at lower 
interest rates and increase the Company's ability to repurchase 
common stock and warrants.  The Company expects this line of 
credit facility to be in place by the end of the second quarter.

	Cash outflows from operating activities of $3.9 million for 
the three months ended March 31, 1997 primarily reflect increases 
in working capital partly offset by income from operations. 

	During the three months ended March 31, 1997, the Company 
used $0.6 million for investing activities, representing capital 
expenditures of $10.1 million offset by $8.9 million of cash 
proceeds received for the sale of the Company's two ready-mixed 
and other concrete operations in Illinois. 

	Net cash inflows from financing activities of $25.8 million 
for the three months ended March 31, 1997 primarily reflect the 
proceeds from the long-term private placement of the 7.31% senior 
notes and the exercise of employee stock options, partially offset 
by the redemption of $28.0 million of the 10% senior notes in 
March 1997.

	Working capital on March 31, 1997 was $84.7 million as 
compared to $77.0 million on December 31, 1996.  Current assets 
increased $26.6 million primarily due to higher marketable 
securities and inventory balances.  Current liabilities increased 
$18.8 million primarily due to the reclassification of $50.0 
million of 10% senior notes to current liabilities, reflecting the 
April 1997 redemption, partially offset by the redemption of the 
$28.0 million of the 10% senior notes.  

 The $2.2 million increase in the Company's deferred tax asset 
is primarily due to the tax benefit recognized related to the 
exercise of employee stock options.  The investment in joint 
ventures at March 31, 1997 was consistent with the year-end 
balance as cash distributions paid by Kosmos Cement Company 
approximated the Company's share of equity earnings. Net property, 
plant and equipment decreased $4.8 million reflecting depreciation 
and the sale of the Company's two ready-mixed and other concrete 
operations in Illinois, partially offset by capital expenditures.
	
	In February 1997, the Company's Board of Directors declared a 
$0.05 per share dividend which was paid on March 14, 1997 to 
shareholders of record as of March 1, 1997.  Total dividends paid 
were approximately $0.5 million.  

	The Company is subject to extensive, stringent and complex 
federal, state and local laws, regulations and ordinances 
pertaining to the quality and the protection of the environment 
and human health and safety, requiring the Company to devote 
substantial time and resources in an effort to maintain continued 
compliance.  Many of the laws and regulations apply to the 
Company's former activities, properties and facilities as well as 
its current operations. Changes to such regulations or the 
enactment of new regulations in the future could require the 
Company to undertake capital improvement projects or to cease or 
curtail certain current operations or could otherwise 
substantially increase the capital, operating and other costs 
associated with compliance.  Moreover, there can be no assurances 
that judicial or administrative proceedings, seeking penalties or 
injunctive relief, will not be brought against the Company for 
alleged non-compliance with applicable environmental laws and 
regulations relating to matters as to which the Company is 
currently unaware. In addition, if releases of hazardous 
substances are discovered to have occurred at facilities currently 
or previously owned or operated by the Company, or at facilities 
to which the Company has sent waste materials, the Company may be 
subject to liability for the investigation and remediation of such 
sites (See Note 8).

	The Company believes that it has adequately provided for 
costs related to its ongoing obligations with respect to known 
environmental liabilities. Expenditures for environmental 
liabilities during the first three months of 1997 did not have a 
material effect on the financial condition or cash flows of the 
Company.


Forward-Looking Statements

	This Management's Discussion and Analysis of Financial 
Condition and Results of Operations and other sections of this 
Form 10-Q contain forward-looking statements within the meaning of 
Section 27A of the Securities Exchange Act of 1933 and Section 21E 
of the Securities Exchange Act of 1934.  These forward-looking 
statements are based on current expectations, estimates and 
projections concerning the general state of the economy and the 
industry and market conditions in certain geographic locations in 
which the Company operates.  Words such as "expects", 
"anticipates", "intends", "plans", "believes", "estimates", and 
variations of such words and similar expressions are intended to 
identify such forward-looking statements. These statements are not 
guarantees of future performance and involve certain risks, 
uncertainties and assumptions which are difficult to predict. 
Therefore, actual results and outcomes may differ materially from 
what is expressed or forecasted in such forward-looking 
statements.  The Company undertakes no obligation to update 
publicly any forward-looking statement as a result of new 
information, future events or other factors.

	The Company's business is cyclical and seasonal, the effects 
of which cannot be accurately predicted.  Risks and uncertainties 
include changes in general economic conditions (such as changes in 
interest rates), changes in economic conditions specific to any 
one or more of the Company's markets (such as the strength of 
local real estate markets and the availability of public funds for 
construction), adverse weather, unexpected operational 
difficulties, changes in governmental and public policy including 
increased environmental regulation, the outcome of pending and 
future litigation, the successful negotiation of labor contracts 
and the continued availability of financing in the amounts, at the 
times and on the terms required to support the Company's future 
business.  Other risks and uncertainties could also affect the 
outcome of the forward-looking statements.


Results of Operations

	Consolidated net sales of $60.8 million during the first 
quarter of 1997 were $7.8 million higher than the comparable 
prior-year period results.  The increase in net sales primarily 
reflects cement price increases since April 1996 combined with 
higher cement shipments due to favorable weather conditions during 
1997.  The Company implemented price increases of $1 to $2 per ton 
in most markets effective April 1, 1997.

	Cement sales of $49.4 million during the first quarter of 
1997 were $6.4 million greater than the comparable prior-year 
period results, primarily due to an 8% increase in the average net 
realized selling prices for the first three months of 1997 over 
the comparable period in 1996. In addition, cement shipments for 
1997 were 7% above the comparable period in 1996 due to favorable 
weather conditions in 1997 versus the harsh conditions in 1996.

	Sales of construction aggregates of $5.7 million during 
1997 were $2.6 million higher than the comparable prior-year 
period results.  This is primarily attributable to higher average 
net realized selling prices and a substantial increase in overall 
construction aggregate shipments reflecting favorable weather 
conditions and increased demand in 1997.

	Ready-mixed concrete and other operations sales during the 
first quarter of 1997 were $5.8 million, $1.2 million below the 
comparable prior-year period results, primarily reflecting lower 
shipments during the first three months of 1997, partly offset by 
higher selling prices.  The lower shipments primarily reflect 
extremely wet weather during the months of February and March in 
the Memphis, Tennessee area.  The Company's central Illinois 
ready-mixed and other concrete operations were sold in March 1997.

	The Company's operations are seasonal and, consequently, the 
interim results are not indicative of the results to be expected 
for the full year.	  		

	Gross profit from the cement operations was $11.0 million in 
1997 as compared to gross profit of $5.9 million for the 
comparable prior-year period.  Gross profit was higher than the 
previous year at every plant during the first quarter of 1997 
reflecting higher cement selling prices and shipments than in 
1996.  In addition, lower overall repair and maintenance costs in 
1997 contributed to the improvement in gross profit.

	Construction aggregates had a loss at the gross profit level 
of $2.8 million during the first quarter of 1997 which was $1.3 
million better than the comparable prior-year period. The improved 
1997 first quarter results primarily reflect higher average 
selling prices and shipments. 

	Gross profit from ready-mixed concrete and other construction 
products was $0.3 million for 1997, a $0.1 million decrease from 
the comparable prior-year period.  These results primarily reflect 
a decrease in shipments, partly offset by higher prices.          
    

	Included in the calculation of gross profit are sales less 
cost of sales including depreciation related to cost of sales 
(which excludes depreciation related to office equipment, 
furniture and fixtures which are not related to the cost of 
sales).

	Pre-tax income from joint ventures of $0.7 million during the 
first quarter of 1997 reflects the results of the Kosmos Cement 
Company, a partnership in which the Company has a 25% interest.  
The results for the three months ended March 31, 1997 were $0.2 
million higher than the comparable prior-year period reflecting 
higher net realized selling prices, higher shipments and lower 
production costs. 

	Other income of $0.7 million during the first quarter of 1997 
decreased $0.9 million from the comparable prior-year period.  
This decrease is due primarily to state and local tax refunds, 
including interest related to prior years, included in other 
income in 1996. 

	Selling, general and administrative expenses of $7.7 million 
during the first quarter of 1997 represent an increase of $0.5 
million over the comparable prior-year period expense.  This 
increase primarily reflects higher selling and administrative 
expenses related to the Company's cement operations.  Selling, 
general and administrative expenses for the three months ended 
March 31, 1997 include $1.1 million of other postretirement 
benefit costs related to the Company's presently retired 
employees.   

	Interest expense of $1.7 million in the first quarter of 1997 
represents a decrease of $0.2 million over the comparable prior-
year period expense. Capitalized interest was $0.2 million in the 
first quarter of 1997 and $0.1 million in the comparable prior-
year period. The decrease in interest expense is primarily 
attributable to higher capitalized interest in 1997 and the early 
redemption of the $28.0 million 10% senior notes, offset partly by 
interest incurred during March 1997 on the new $50.0 million 7.31% 
senior notes.

	The income tax expense of $0.1 million during the first 
quarter of 1997, an increase of $1.7 million from the comparable 
prior-year period expense, primarily reflects pre-tax earnings in 
the first quarter of 1997 as compared to a loss in the prior-year 
period.  

	Net income of $0.3 million, or $0.02 per share, during the 
first quarter of 1997 was $3.5 million, or $0.31 per share, higher 
than the comparable prior-year period results. This improvement is 
primarily due to improved results in the cement and construction 
aggregate product lines due to favorable weather conditions in 
1997 as compared to 1996.  Also contributing to the favorable 
increase in net income for the first quarter of 1997 over the 
prior-year results was lower interest expense, partly offset by 
increased selling, general and administrative expenses and 
increased income tax expense due to higher pre-tax earnings.



 



 

 








PART II.  OTHER INFORMATION




ITEM 1.  LEGAL PROCEEDINGS

	See Note 9 of Notes to Financial Statements.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

	(a)	Index of Exhibits:

		11.	Statement Re Computation of Per Share Earnings.

		12.	Statement Re Computation of Ratio of Earnings to 
			Fixed Charges.

		27.	Financial Data Schedule.

	(b)	Reports on Form 8-K

		Form 8-K, March 21, 1997 - Item 5 - Other Events.












                            SIGNATURES



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

							LONE STAR INDUSTRIES, INC.



Date: May 9, 1997				By:  WILLIAM E. ROBERTS	
							     William E. Roberts
							    Vice President, Chief
							      Financial Officer,
							   Controller and Treasurer



Date: May 9, 1997				By:    JAMES W. LANGHAM	 
							       James W. Langham
							        Vice President