UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q

/x/  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934

     FOR THE QUARTER ENDED MARCH 28, 1998

                                       OR

     Transition  Report  Pursuant  to  Section  13 or  15(d)  of the  Securities
     Exchange Act of 1934


     Commission File Number 1-3258

                                   LUKENS INC.
                              50 South First Avenue
                           Coatesville, PA 19320-0911
                                 (610) 383-2000

Incorporated in Delaware
I.R.S. Employer Identification Number 23-2451900

     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

                      SHARES OUTSTANDING AS OF MAY 2, 1998
                    Common Stock, $.01 Par Value, 15,032,108

<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements.

Consolidated Statements of Earnings
(Dollars and shares in thousands except per share amounts)
<TABLE>
<CAPTION>
<S>                                                                                   <C>                       <C>    
                                                                                                  FIRST QUARTER
                                                                                              Thirteen Weeks Ended
                                                                                             March 28,        March 29,
                                                                                               1998             1997
-------------------------------------------------------------------------------------------------------  ---------------
Net Sales                                                                             $        258,342          248,118
Operating Costs and Expenses
    Cost of products sold                                                                      245,881          233,837
    Selling and administrative expenses                                                         14,371           12,386
-------------------------------------------------------------------------------------------------------  ---------------
        Total operating costs and expenses                                                     260,252          246,223

Operating Earnings (Loss)                                                                       (1,910)           1,895

    Interest expense                                                                             4,507            4,729
-------------------------------------------------------------------------------------------------------  ---------------

Earnings (Loss) Before Income Taxes                                                             (6,417)          (2,834)

    Income tax expense (benefit) (Note 2)                                                       (2,034)            (856)
-------------------------------------------------------------------------------------------------------  ---------------

Net Earnings (Loss)                                                                   $         (4,383)          (1,978)
------------------------------------------------------------------------------------------------------------------------

    Dividend requirements for preferred stock                                                     (497)            (499)

Net Earnings (Loss) Applicable to Common Stock                                        $         (4,880)          (2,477)
------------------------------------------------------------------------------------------------------------------------

Earnings (Loss) Per Common Share
    Basic                                                                             $           (.33)            (.17)
    Diluted                                                                           $           (.33)            (.17)

Common Shares and Equivalents Outstanding
    Basic                                                                                       14,838           14,805
    Diluted                                                                                     16,532           16,251

Cash Dividends on Common Stock - Per Share                                            $            .25              .25
------------------------------------------------------------------------------------------------------------------------
</TABLE>
        The accompanying notes are an integral part of these statements.

                                        1

<PAGE>
Consolidated Balance Sheets
(Dollars in thousands)
<TABLE>
<CAPTION>
<S>                                                                                         <C>                             <C>  
                                                                                                    March 28,         December 27,
                                                                                                     1998                1997
--------------------------------------------------------------------------------------------------------------    ----------------
Assets
      Current Assets
          Cash and cash equivalents                                                         $           6,138               6,629
          Receivables, less allowance of $6,734 in 1998 and $6,716 in 1997                            124,056             118,026
          Inventories
                Products finished and in process                                                      115,224             117,455
                Raw materials                                                                          27,050              23,326
                Supplies                                                                                4,332               4,806
      --------------------------------------------------------------------------------------------------------    ----------------
                                                                                                      146,606             145,587
          Deferred income taxes                                                                        13,725              13,725
          Prepaid expenses and other                                                                    1,275               1,733
      --------------------------------------------------------------------------------------------------------    ----------------
          Total current assets                                                                        291,800             285,700

      Plant and Equipment                                                                             963,665             960,823
        Less accumulated depreciation                                                                 476,028             463,264
      --------------------------------------------------------------------------------------------------------    ----------------
          Net plant and equipment                                                                     487,637             497,559
      Intangible Assets,net of accumulated amortization of $12,062 in 1998
        and $11,352 in 1997                                                                            56,542              58,139
      Deferred Income Taxes                                                                            37,109              34,599
      Other Assets                                                                                      1,481               1,433
      --------------------------------------------------------------------------------------------------------    ----------------

      Total Assets                                                                          $         874,569             877,430
      ----------------------------------------------------------------------------------------------------------------------------

Liabilities and Stockholders' Investment
      Current Liabilities
          Accounts payable                                                                  $          96,817              87,618
          Accrued employment costs                                                                     39,423              43,787
          Other accrued expenses (Note 3)                                                              26,724              33,510
          Current maturities of long-term debt                                                          6,622               6,276
      --------------------------------------------------------------------------------------------------------    ----------------
          Total current liabilities                                                                   169,586             171,191

      Long-Term Debt                                                                                  247,030             244,671
      Retirement Benefits
          Pensions                                                                                     55,062              53,690
          Medical and life insurance                                                                  152,240             151,307
      Other Liabilities                                                                                14,974              14,821
      --------------------------------------------------------------------------------------------------------    ----------------
          Total liabilities                                                                           638,892             635,680
      Commitments and Contingencies (Note 3)

      Stockholders' Investment
          Series preferred stock, 1,000,000 shares authorized
            Series B ESOP convertible preferred
            (454,308 shares outstanding in 1998 and 470,300 in 1997)                                   27,259              28,218
          Common stock, 40,000,000 shares authorized and 15,813,259 issued                                158                 158
          Capital in excess of par value                                                               89,790              88,444
          Earnings invested                                                                           141,520             150,140
          Foreign currency translation adjustments                                                     (1,640)             (1,739)
          Deferred compensation - ESOP                                                                 (9,308)            (10,619)
          Deferred compensation - restricted stock                                                     (2,623)             (2,574)
          Repurchased stock, at cost (804,242 shares in 1998 and 872,032 in 1997)                      (9,479)            (10,278)
      --------------------------------------------------------------------------------------------------------    ----------------
          Total stockholders' investment                                                              235,677             241,750
      --------------------------------------------------------------------------------------------------------    ----------------

      Total Liabilities and Stockholders' Investment                                        $         874,569             877,430
      ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
        The accompanying notes are an integral part of these statements.

                                        2
<PAGE>
Consolidated Statements of Cash Flows
(Dollars in thousands)
<TABLE>
<CAPTION>
<S>                                                                                       <C>                          <C>    
                                                                                                        FIRST QUARTER
                                                                                                    Thirteen Weeks Ended
                                                                                                 March 28,           March 29,
                                                                                                   1998                1997
----------------------------------------------------------------------------------------------------------      --------------
Operating Activity
     Net earnings (loss)                                                                  $        (4,383)             (1,978)

Adjustments to Reconcile Net Earnings (Loss) to
  Cash Flow (Used for) From Operating Activity
     Depreciation and amortization                                                                 13,395              12,481
     Income taxes deferred                                                                         (2,510)             (1,568)
     Provision for uncollectible accounts                                                           1,555               1,637
     Retirement benefit funding less than expense                                                   3,192                 820
     Changes in working capital affecting operations
          Accounts receivable                                                                      (7,585)            (25,875)
          Inventories                                                                              (1,019)             (9,825)
          Prepaid expenses and other                                                                  458                 675
          Accounts payable                                                                          9,218              25,594
          Accrued expenses                                                                        (11,150)             (5,238)
     Other, net                                                                                       757                (223)
----------------------------------------------------------------------------------------------------------      --------------
          Cash flow from (used for) operating activity                                              1,928              (3,500)

Financing Activity
     Long-term debt
          Other borrowed                                                                            4,100              10,200
          Other repaid                                                                               (112)                (48)
     Dividends paid                                                                                (4,269)             (4,277)
     Proceeds from stock options exercised                                                            472                   -
----------------------------------------------------------------------------------------------------------      --------------
          Net from financing activity                                                                 191               5,875

Investing Activity
     Capital expenditures                                                                          (2,610)             (4,402)
     Proceeds from sale of assets/subsidiaries                                                          -                 371
     Other, net                                                                                         -                 454
----------------------------------------------------------------------------------------------------------      --------------
          Net for investing activity                                                               (2,610)             (3,577)

Cash and Cash Equivalents
     Increase (decrease)                                                                             (491)             (1,202)
     Start of period                                                                                6,629              10,282
----------------------------------------------------------------------------------------------------------      --------------
          End of period                                                                   $         6,138               9,080
------------------------------------------------------------------------------------------------------------------------------
</TABLE>

        The accompanying notes are an integral part of these statements.

                                        3
<PAGE>

SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands except per share amounts)

1.   Basis of Presentation

     On December 15, 1997, Lukens entered into a merger agreement with Bethlehem
     Steel Corporation.  The agreement was subsequently amended as of January 4,
     1998. Under the merger agreement, Bethlehem Steel Corporation would acquire
     Lukens  outstanding  common  and  preferred  stock.  A special  meeting  of
     stockholders  is expected to be held on May 28, 1998, to vote on the merger
     agreement.

     The Consolidated  Financial Statements and Notes to Consolidated  Financial
     Statements  were  prepared  assuming  a  going-concern  basis  and  did not
     recognize the impact of the merger.

     The  financial   statements  are  unaudited  but  reflect  all  adjustments
     (consisting  of normal  recurring  accruals)  which are,  in the opinion of
     management,  necessary  to a fair  statement of the results for the interim
     periods  presented.   The  preparation  of  our  financial   statements  in
     conformity with generally accepted accounting principles requires estimates
     and   assumptions   that  affect  the  reported   amounts  and  contingency
     disclosures.  These financial statements should be read in conjunction with
     the financial  statements and related notes included in the 1997 Form 10-K.
     Results  from any  interim  period are not  necessarily  indicative  of the
     results for a full year.


2.   Income Taxes

     Year-to-date  results were used to develop the  effective tax rates in 1998
     and 1997.


3.   Commitments and Contingencies

     Regarding the Helen Kramer  Superfund site,  Lukens'  settlement  agreement
     (the  Settlement  Agreement)  was finalized on April 14, 1998.  The Primary
     Settling  Parties  submitted  their  signature pages on or before April 20,
     1998.  Pursuant  to  the  terms  of the  Settlement  Agreement,  Lukens  is
     obligated  to pay  approximately  $5,600 to the  Primary  Settling  Parties
     within  30  days of the  effective  date of the  Settlement  Agreement.  In
     consideration of this

                                       4
<PAGE>

     payment,  the Primary  Settling Parties agreed to use their best efforts to
     cause  Lukens  to be  included  as a party in any  consent  decree or other
     settlement  document  relating  to the site  entered  into with the  United
     States and/or the State of New Jersey.  In addition,  the Primary  Settling
     Parties  provided  a release  and  covenant  not to sue  Lukens  for claims
     covered by the Settlement Agreement. The release and covenant not to sue is
     subject to certain limited reopeners.

     Lukens  submitted a  signature  page to the  Primary  Settling  Parties for
     inclusion in the consent decree, which the Primary Settling Parties entered
     into with the United States (the US Consent  Decree).  Lukens  believes the
     Primary  Settling  Parties  submitted  the executed  signature  page to the
     United  States on April 22, 1998.  The US Consent  Decree  provides,  among
     other things, that (i) the responsibility of Lukens shall be limited to the
     payment of money in the amount and on the terms  provided in the Settlement
     Agreement, (ii) Lukens will avoid joint and several liability to the United
     States if Lukens complies with the terms of the Settlement Agreement, (iii)
     the United States will provide a site-wide  covenant not to sue, subject to
     certain limited reservation of rights and reopeners,  as well as a covenant
     not to sue from the  trustees  of Federal  natural  resources  for  natural
     resource damages, subject to the usual reservation of rights and reopeners,
     (iv) Lukens will receive  contribution  protection for matters addressed in
     the Consent Decree and (v) all settling parties, including Lukens, covenant
     not to sue and to dismiss all claims they have against  each other  related
     to the site.

     Lukens  submitted  signature  pages to the  Primary  Settling  Parties  for
     inclusion in the consent decree and the natural  resource  damages  consent
     decree,  which the Primary  Settling Parties entered into with the State of
     New Jersey (the State Consent Decrees).  The State Consent Decrees provide,
     among other things,  that (i) the responsibility of Lukens shall be limited
     to the  payment  of money in the amount  and on the terms  provided  in the
     Settlement Agreement, (ii) Lukens will avoid joint and several liability to
     the State of New Jersey if Lukens complies with the terms of the Settlement
     Agreement, (iii) the State of New Jersey will provide a site- wide covenant
     not to sue, subject to certain limited  reservation of rights and reopeners
     and (iv) Lukens will receive contribution  protection for matters addressed
     in the Consent Decrees.

                                       5
<PAGE>
     There have not been any significant developments to the other environmental
     issues previously discussed in the 1997 Form 10-K.

     Lukens has been  designated  a  potentially  responsible  party (PRP) under
     Superfund law at certain waste  disposal sites and  continually  monitors a
     range  of  other  environmental  issues.  Superfund  designations  are made
     regardless of the extent of the company's  direct or indirect  involvement.
     These  claims  are  in  various  stages  of   administrative   or  judicial
     proceedings,  and include  demands for  recovery of incurred  costs and for
     future  investigation  or  remedial  actions.  The  company  accrues  costs
     associated with environmental  matters when they become probable and can be
     reasonably estimated.  In assessing  environmental  liability,  the company
     considers the extent and type of hazardous  substances at a site, the range
     of  technologies  that  can be used  for  remediation,  evolving  laws  and
     regulations, the allocation of costs among potentially responsible parties,
     and the number and financial strength of those parties.

     Due  to  their  uncertain   nature,   amounts  accrued  for   environmental
     liabilities could differ, perhaps significantly, from the actual costs that
     will be incurred. No potential insurance recoveries were taken into account
     in determining  the company's cost estimates or reserves.  Management  does
     not anticipate that its financial  position will be materially  affected by
     additional  environmental  remediation costs,  although quarterly or annual
     operating results could be materially affected by future developments.

     The company is party to various claims,  disputes,  legal actions and other
     proceedings involving negligence,  contracts, equal employment opportunity,
     occupational   safety  and  various  other  matters.   In  the  opinion  of
     management, the outcome of these matters should not have a material adverse
     effect on the consolidated  financial condition or results of operations of
     the company.


                                       6
<PAGE>

Item 2. Management's Discussion and Analysis of
        Financial Condition and Results of Operations.
        (Dollars in thousands)

Changes in Financial Condition during
the Thirteen Weeks Ended March 28, 1998

Capital Structure

Cash and cash  equivalents  totaled  $6,138 at the end of the first  quarter,  a
decrease of $491 from the end of 1997. Working capital of $122,214 was up $7,705
from the end of 1997.  The  increase  primarily  reflected  a build in  accounts
receivables.  The current  ratio was 1.7 at the end of the first  quarter and at
year-end 1997.

Debt at the end of the first  quarter was  $253,652,  an increase of $2,705 from
the beginning of the year. The increase reflected borrowings under our revolving
credit agreement. The ratio of long-term debt to capital was 51.2 percent, which
compared to 50.3 percent at year-end 1997.


Liquidity

Cash flow from operating  activity totaled $1,928 for the first quarter compared
to cash  required  from  operating  activity  of $3,500 in the  comparable  1997
period.  Lower  working  capital  requirements  combined  with lower  retirement
benefit funding contributed to the improved cash flow.

Financing  activity  generated  $191 with net  borrowings of $3,988 and proceeds
from the exercise of stock options  essentially  offset by dividend  payments of
$4,269. Investing activity required $2,610 for capital expenditures.

As  discussed  in Note 3 to the  Consolidated  Financial  Statements,  a  $5,600
settlement  payment  will be made in the  second  quarter  of 1998  related to a
Superfund  site.  Order  backlog was  $178,100 at the end of the first  quarter,
which was 7 percent higher than year-end 1997 backlog.


                                       7
<PAGE>

Results of Operations for the Quarters Ended
March 28, 1998 and March 29, 1997

Operating Results

A first  quarter  operating  loss of $1,910  compared to  operating  earnings of
$1,895 in the first quarter of 1997.  Despite a strong  improvement  in Carbon &
Alloy Group results,  the Stainless Group recorded  significantly  higher losses
that  resulted  in a  consolidated  loss for the  quarter.  Sales  for the first
quarter were  $258,342,  up 4 percent  from 1997 sales of $248,118.  Most of the
increase in sales resulted from higher shipments in the Carbon & Alloy Group.

Interest Expense

Interest  expense  of $4,507  was down 5 percent  compared  to 1997  expense  of
$4,729.

Income Tax Expense (Benefit)

The  effective  tax rate  was 31.7  percent  in 1998 and 30.2  percent  in 1997.
Year-to-date  results were used to develop the  effective  tax rates in 1998 and
1997.


Net Earnings (Loss)

A net loss of $4,383 was  recorded for the first  quarter of 1998  compared to a
net loss of $1,978 for the same period in 1997.


                                       8
<PAGE>

Business Group Results
                                                     Operating
                          Net Sales               Earnings (Loss)
                    1Q 1998      1Q 1997       1Q 1998        1Q 1997

Carbon & Alloy     $139,465      123,010        16,187         7,896
Stainless           118,877      125,108       (13,019)       (3,066)
Corporate                --           --        (5,078)       (2,935)

                   $258,342      248,118        (1,910)        1,895


Carbon & Alloy Group

Net sales  increased  13  percent.  The  increase  reflected  higher  shipments,
particularly  in the carbon steel product line due to increased  utilization  of
the SMART  system.  Shipped  tons were 207,900 in 1998,  19 percent  higher than
175,400  tons in 1997.  With the  continued  growth in carbon  shipments,  sales
reflected a lower-  value  shipment  mix. The volume  improvement,  coupled with
strong  manufacturing  performance,   translated  into  a  significant  earnings
improvement from the first quarter of 1997.

Stainless Group

The group recorded an operating loss in the first quarters of 1998 and 1997. The
continued  deterioration  in selling prices  combined with lower shipment levels
resulted in a larger  operating loss compared to 1997. Sales were down 5 percent
in 1998. Shipments of 66,900 tons in 1998 were down 6 percent compared to 71,200
tons in 1997.

                                       9
<PAGE>

                           PART II - OTHER INFORMATION


Item 1.  Legal Proceedings.

Legal  proceedings  disclosures  concerning  developments  in the  Helen  Kramer
Superfund site are  incorporated  herein by reference to Note 3 Commitments  and
Contingencies included in Part I of this Form 10-Q.


Item 6.  Exhibits and Reports on Form 8-K.

(a)  Exhibits
     (11) Statement regarding computation of per share earnings
     (27) Financial Data Schedule

(b)  Reports on Form 8-K
     A report was filed on January 5, 1998, for Item 5. Other Events.,  and Item
     7. Financial  Statements,  Pro Forma  Financial  Information and Exhibits.,
     concerning an amendment to the merger with Bethleham Steel Corporation.  No
     other report on Form 8-K was filed during the quarter ended March 28, 1998.


                                       9
<PAGE>

                                   SIGNATURES

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




                                                  LUKENS INC.




May 7, 1998                         /s/ R. W. Van Sant
                                        R. W. Van Sant
                                        Chairman and Chief Executive Officer


May 7, 1998                        /s/ John C. van Roden, Jr.
                                       John C. van Roden, Jr.
                                       Senior Vice President and
                                       Chief Financial Officer


May 7, 1998                        /s/ P. Blaine Clemens
                                       P. Blaine Clemens
                                       Vice President and Controller


                                       10