<PAGE>
                    SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549
                    ----------------------------------
                                 FORM 10-Q

(Mark One)

[X] Quarterly report under Section 13 or 15(d) of the Securities 
    Exchange Act of 1934.  For the quarterly period ended March 31, 
    1998, or 

[ ] Transition report pursuant to Section 13 or 15(d) of the Secu-
    rities Exchange Act of 1934.  For the transition period from 
    _______________ to _______________.

Commission File Number:  0-4791

                        PAUL MUELLER COMPANY
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        (Exact name of registrant as specified in its charter)

                              Missouri
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    (State or other jurisdiction of incorporation or organization)

                             44-0520907
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                (I.R.S. Employer Identification No.)

1600 W. Phelps Street, P O Box 828, Springfield, Missouri  65801-0828
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        (Address of principal executive offices)           (Zip Code)

Registrant's telephone number, including area code:  (417) 831-3000

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         (Former name, former address and former fiscal year, 
                    if changed since last report)

Indicate by check mark whether the Registrant (1) has filed all re-
ports 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 the number of shares outstanding of the issuer's Common Stock 
as of May 7, 1998:  1,168,021

                                  1

<PAGE>   2

PART I	-	FINANCIAL INFORMATION

The condensed financial statements included herein have been prepared 
by the Company without audit, pursuant to the rules and regulations 
of the Securities and Exchange Commission.  Certain information and 
footnote disclosures normally included in the financial statements, 
prepared in accordance with generally accepted accounting principles, 
have been condensed or omitted pursuant to such rules and regulations, 
although the Company believes that the disclosures are adequate to 
make the information presented not misleading.  It is suggested that 
these condensed financial statements be read in connection with the 
financial statements and the notes thereto included in the Company's 
latest annual report on Form 10-K.  This report reflects all adjust-
ments which are, in the opinion of management, necessary for a fair 
statement of the results for the interim period.

                                  2

<PAGE>   3
                PAUL MUELLER COMPANY AND SUBSIDIARIES
                CONSOLIDATED CONDENSED BALANCE SHEETS
                       (Dollars in Thousands)
<TABLE>
<CAPTION>
                                                    Mar. 31   Dec. 31
                                                      1998      1997
                                                    -------   -------
                                                  (Unaudited)
<S>                                                <C>       <C>
ASSETS
------
Current Assets:
  Cash............................................ $  1,245  $  3,402
  Available-for-sale investments, at market.......    6,842     8,347
  Accounts and notes receivable, less reserve 
    of $577 at March 31, 1998, and $559 at 
    December 31, 1997, for doubtful accounts......   15,475    16,113
  Inventories (Note 2) -
    Raw materials and components.................. $  6,346  $  5,101
    Work-in-process...............................    3,223     1,728
    Finished goods................................    3,771     1,203
                                                   --------  --------
                                                   $ 13,340  $  8,032
  Prepayments.....................................      440       475
                                                   --------  --------
        Total Current Assets...................... $ 37,342  $ 36,369

Other Assets......................................    3,504     3,523

Property, Plant & Equipment, at cost.............. $ 55,943  $ 54,313
  Less - Accumulated depreciation.................   38,236    37,658
                                                   --------  --------
                                                   $ 17,707  $ 16,655
                                                   --------  --------
                                                   $ 58,553  $ 56,547
                                                   ========  ========
LIABILITIES AND SHAREHOLDERS' INVESTMENT
----------------------------------------
Current Liabilities:
  Accounts payable................................ $  4,221  $  4,296
  Accrued expenses................................    7,112     6,249
  Advance billings................................    6,298     5,225
                                                   --------  --------
        Total Current Liabilities................. $ 17,631  $ 15,770
Other Long-Term Liabilities.......................    1,245     1,100
Contingencies (Note 4)............................
Shareholders' Investment:
  Common stock, par value $1 per share - Autho-
    rized 20,000,000 shares - Issued 1,342,325
    shares........................................ $  1,342  $  1,342
  Preferred stock, par value $1 per share - Autho-
    rized 1,000,000 shares - No shares issued.....        -         -
  Paid-in surplus.................................    4,307     4,307
  Retained earnings...............................   36,582    36,582
                                                   --------  --------
                                                   $ 42,231  $ 42,231
  Less - Treasury stock, 174,304 shares at 
         March 31, 1998, and December 31, 1997, 
         at cost..................................    2,554     2,554
                                                   --------  --------
                                                   $ 39,677  $ 39,677
                                                   --------  --------
                                                   $ 58,553  $ 56,547
                                                   ========  ========
</TABLE>
 The accompanying notes are an integral part of these balance sheets.

                                  3

<PAGE>   4
                PAUL MUELLER COMPANY AND SUBSIDIARIES
             CONSOLIDATED CONDENSED STATEMENTS OF INCOME
           (Dollars in Thousands Except Per Share Amounts)
                             (Unaudited)
<TABLE>
<CAPTION>
                                                   Three Months Ended
                                                        March 31
                                                   ------------------
                                                     1998      1997
                                                   --------  --------
<S>                                                <C>       <C>
Net Sales........................................  $ 17,424  $ 17,208
Cost of Sales....................................    12,631    12,979
                                                   --------  --------
        Gross Profit.............................  $  4,793  $  4,229
Selling, General & Administrative Expenses.......     4,015     3,903
                                                   --------  --------
        Operating Income.........................  $    778  $    326

Other Income (Expense):
    Interest income..............................  $    107  $    193
    Interest expense.............................        (2)       (2)
    Other, net...................................       124       112
                                                   --------  --------
                                                   $    229  $    303
                                                   --------  --------
Income from Operations before Provision 
    for Income Taxes.............................  $  1,007  $    629
Provision for Income Taxes.......................       306       193
                                                   --------  --------
        Net Income...............................  $    701  $    436
                                                   ========  ========
Earnings per Common Share (Note 3)...............  $   0.60  $   0.37
                                                   ========  ========
</TABLE>
   The accompanying notes are an integral part of these statements.

                                  4

<PAGE>   5
                PAUL MUELLER COMPANY AND SUBSIDIARIES
           CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                       (Dollars in Thousands) 
                             (Unaudited)
<TABLE>
<CAPTION>
                                                   Three Months Ended
                                                        March 31
                                                   ------------------
                                                     1998      1997
                                                   --------  --------
<S>                                                <C>       <C>
Cash Flows from Operating Activities:
  Net income.....................................  $    701  $    436
  Adjustments to reconcile net income to net 
      cash provided (required) by operating 
      activities:
    Bad debt (recovery)..........................        (4)      (45)
    Depreciation and amortization................       606       552
    (Gain) on sales of fixed assets..............         -        (2)
    Changes in assets and liabilities -
      (Increase) in interest receivable..........       (15)      (45)
      Decrease in accounts and notes receivable..       642     2,189
      (Increase) in inventories..................    (5,308)   (4,579)
      Decrease in prepayments....................        35        83
      Decrease (increase) in other assets........         6      (138)
      (Decrease) increase in accounts payable....       (75)    1,454
      Increase in accrued expenses...............       863       424
      Increase in advance billings...............     1,073     1,717
      Increase (decrease) in 
        long-term liabilities....................       145      (559)
                                                   --------  --------
          Net Cash (Required) Provided 
            by Operations........................  $ (1,331) $  1,487

Cash Flows Provided (Requirements) from 
    Investing Activities:
  Proceeds from maturities of investments........  $  3,750  $  4,950
  Purchases of investments.......................    (2,230)   (4,500)
  Proceeds from sales of equipment...............         -         1
  Additions to property, plant and equipment.....    (1,645)     (879)
                                                   --------  --------
          Net Cash (Required) by 
            Investing Activities.................  $   (125) $   (428)

Cash Flows (Requirements) from 
    Financing Activities:
  Dividends paid.................................  $   (701) $   (701)
                                                   --------  --------
          Net Cash (Required) by 
            Financing Activities.................  $   (701) $   (701)
                                                   --------  --------
Net (Decrease) Increase in Cash..................  $ (2,157) $    358

Cash at Beginning of Period......................  $  3,402  $  2,221
                                                   --------  --------
Cash at End of Period............................  $  1,245  $  2,579
                                                   ========  ========

Supplemental Disclosures of Cash Flow Information:
  Cash paid during the period for -
    Interest.....................................  $      -  $      -
    Income taxes.................................         7       435
</TABLE>
    The accompanying notes are an integral part of these statements.

                                  5

<PAGE>   6
                PAUL MUELLER COMPANY AND SUBSIDIARIES
               NOTES TO CONDENSED FINANCIAL STATEMENTS
                       MARCH 31, 1998 AND 1997
                             (Unaudited)

1. The condensed financial statements include the accounts of Paul 
   Mueller Company (Company) and its wholly owned subsidiaries, 
   Mueller International Sales Corporation, Mueller Transportation, 
   Inc., and Mueller Field Operations, Inc.  A summary of the 
   significant accounting policies is included in Note 1 to the 
   consolidated financial statements included in the Company's annual 
   report on Form 10-K for the year ended December 31, 1997.

2. Inventory is recorded at the lower of cost, last-in, first-out 
   (LIFO), or market.

   Because the inventory determination under the LIFO method can only 
   be made at the end of each fiscal year based on the inventory 
   levels and costs at that time, interim LIFO determinations, in-
   cluding those at March 31, 1998, must necessarily be based on 
   management's estimate of expected year-end inventory levels and 
   costs.  Since estimates of future inventory levels and prices are 
   subject to many factors beyond the control of management, interim 
   financial results are subject to final year-end LIFO inventory 
   amounts.  Accordingly, inventory components reported for the period 
   ending March 31, 1998, are estimates based on management's know-
   ledge of the Company's production cycle, the costs associated with 
   this cycle and the sales and purchasing volume of the Company.

3. The net income per share of common stock has been computed on the 
   basis of weighted average shares outstanding:  1,168,021 for 
   periods ended March 31, 1998, and March 31, 1997.

4. The Company was the defendant in a breach-of-contract/breach-of-
   warranty lawsuit concerning reactor vessels sold in 1992 in Tarrant 
   County, Texas (Alcon Laboratories, Inc. versus Paul Mueller Com-
   pany).  As a result of a trial that ended September 19, 1997, the 
   Company received an adverse decision, and the final judgment 
   awarded damages, interest, and attorney's fees totaling $1,700,000 
   to the plaintiff.  Management believes the decision was incorrect 
   and, based on the advice of legal counsel, will appeal the deci-
   sion.  As a result of the decision, a provision of $775,000 was 
   made during the third quarter of 1997 for the ultimate resolution 
   of the matter; the related reserve is included as accrued expenses 
   on the Consolidated Condensed Balance Sheet.  If the decision is 
   upheld on appeal, the Company's liability will exceed the reserve.

   The Company is a defendant in two other lawsuits pending at March 
   31, 1998.  In the opinion of management, after consultation with 
   legal counsel, the outcome of these lawsuits will not have a 
   material adverse effect on the Company's consolidated financial 
   statements.

   The Company currently employs over 900 people, of which approxi-
   mately 400 are represented by the Sheet Metal Workers Union.  The 
   International Union called a strike beginning July 25, 1995, and 
   currently 20 employees are participating.

                                  6

<PAGE>   7
                 PAUL MUELLER COMPANY AND SUBSIDIARIES
       MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATING RESULTS
                       AND FINANCIAL CONDITION

The following is Management's discussion and analysis of the signifi-
cant factors which have affected the Companies' earnings during the 
periods included in the accompanying Consolidated Condensed Statements 
of Income.

The information discussed below in Management's Discussion and Analy-
sis of Operating Results and Financial Condition contains statements 
regarding matters that are not historical facts, but rather are 
forward-looking statements.  These statements are based on current 
financial and economic conditions and current expectations, and 
involve risk and uncertainties.  Actual future results may differ 
materially depending on a variety of factors.  These factors, some 
of which are identified in the discussion accompanying such forward-
looking statements, include, but are not limited to, milk prices paid 
to dairy farmers, feed prices, weather conditions, dairy farm consoli-
dation and other factors affecting the profitability of dairy farmers, 
the price of stainless steel, actions of competitors, labor strife, 
the Registrant's execution of internal performance plans, economic 
conditions in key export markets, the level of capital expenditures 
in the U.S. economy, and other changes to business conditions.

OPERATING RESULTS

Net sales for the quarter ended March 31, 1998, were $17,424,000 ver-
sus $17,208,000 for the quarter ended March 31, 1997.  Although the 
overall level of sales between periods was comparable, Processing 
Equipment shipments increased by $1,652,000, while Dairy Farm Equip-
ment shipments declined by $1,436,000.  The increase in shipments for 
Processing Equipment was due primarily to custom-fabricated Processing 
Equipment, which had a backlog that was 30% higher as of December 31, 
1997, compared to December 31, 1996.  Lower sales were recorded for 
Dairy Farm Equipment for both domestic and international markets, with 
the major portion attributable to decreased domestic sales.  Domestic 
sales of Dairy Farm Equipment for the first quarter of 1998 were ad-
versely affected by lower backlog at December 31, 1997, compared to 
December 31, 1996, coupled with soft market conditions during the 
first quarter as a result of concerns about the potential for high 
feed costs and the government's involvement in domestic milk markets.  
Export shipments of Dairy Farm Equipment were down from the corre-
sponding quarter of the prior year in several key markets.  The strong 
U.S. dollar, a lower backlog going into 1998, and higher inventory 
levels at some customers all contributed to decreased order entry and 
shipments during the first quarter.

The gross profit rate for the three months ended March 31, 1998, was 
27.5% versus 24.6% for the same period a year ago.  The improved gross 
profit rate was due to higher gross margins and lower net manufac-
turing burden, as absorption was higher.  The improvement in gross 
margins occurred primarily in custom-fabricated Processing Equipment 
as a result of improved labor efficiency in the factory and a higher 
quality sales backlog as of December 31, 1997, compared to December 
31, 1996.  Manufacturing burden absorption increased during the first 
quarter of 1998 compared to the first quarter of 1997, as the level of 
manufacturing activity was greater and labor efficiency improved in 
both manufacturing facilities.

Selling, general, and administrative expenses for the quarter ended 
March 31, 1998, increased by $112,000 over the quarter ended March 31, 
1997.  The increase was primarily due to higher expenditures for per-
sonnel, factory consumables, and travel expenses.  

Other income (expense) was lower for the first quarter of 1998 com-
pared to the same period of a year ago primarily due to lower interest 
income, as the level of investable funds was lower than the first 
quarter of 1997.

                                  7

<PAGE>   8

The effective tax rate for the first quarter of 1998 and 1997 varied 
from the statutory tax rate (34%) primarily as a result of tax-exempt 
interest, the lower effective rate for the Foreign Sales Corporation, 
and tax credits.

As previously reported, the labor contract with the Sheet Metal 
Workers Union (which covers a portion of the employees at the Spring-
field, Missouri, plant) expired on June 11, 1994.  Negotiations with 
union representatives continued until an impasse was reached, and the 
Company implemented specific provisions of its final offer effective 
September 19, 1994.  In November 1994, the Regional Director of the 
National Labor Relations Board (NLRB) also concluded that a lawful 
impasse had been reached in negotiations prior to the Company's imple-
mentation of its offer.

However, on December 22, 1994, the Regional Director of the NLRB 
issued an unfair labor practice complaint against the Company for 
refusing to supply information to union representatives about the 
personal health insurance claims of individual employees and their 
dependents and reversed his previous decision regarding the imple-
mentation of changes in wages and benefits.  A hearing on these and 
other unfair labor practice issues was held during August 1996 by an 
administrative law judge of the NLRB, who ruled against the Company on 
some unfair labor practice issues, and the Company and the union have 
both appealed the decision to the NLRB.  A decision by the NLRB is not 
expected for several months, and there can be an appeal from any NLRB 
decision, either by the Company or by the union.  An additional 
hearing was held before an administrative law judge of the NLRB in 
November 1997, and the judge ruled against the Company on the unfair 
labor practice issues involved.  The Company has appealed the decision 
to the NLRB.  A final determination of all charges pending may take up 
to two years; however, management believes, based on an evaluation by 
counsel, that there is no material financial exposure to the Company.

The Company currently employs about 900 people, of which approximately 
400 at the Springfield, Missouri, facility are represented by the 
Sheet Metal Workers Union.  The International Union called a strike 
which began on July 25, 1995, and the largest number of employees 
participating was approximately 185 during the fourth quarter of 1995.  
A substantial number of employees returned to work during 1996, and 
currently there are only 20 employees participating.  No action has 
been taken by the union to prevent nonstriking employees from working.

The Company has implemented the provisions of its revised and final 
offer effective April 1, 1996, which remains open for the union's 
acceptance, and no further negotiations are scheduled.  

The Company has facilities located in Springfield, Missouri, and 
Osceola, Iowa.  There are approximately 800 employees assigned to the 
Springfield facility, and there are an additional 100 employees at the 
Osceola facility, none of which are represented by a labor union.

Looking to the balance of 1998, there are factors that could affect 
the results of operations.  If there is expanded employee partici-
pation for an extended period of time in the strike mentioned above, 
it could have an adverse impact on the level of production and the 
ability to secure orders.  The average price paid to domestic dairy 
farmers for milk is expected to decline in the coming months, and this 
may have an adverse effect on sales of Dairy Farm Equipment.  The 
price of stainless steel is projected to remain stable for the balance 
of this year.

The backlog of sales at March 31, 1998, was $29,600,000 compared to 
$28,100,000 at March 31, 1997.  The March 31, 1998, backlog represents 
orders that will be completed and shipped over the next twelve months.

                                  8

<PAGE>   9

FINANCIAL CONDITION

The consolidated financial condition and the liquidity of the Company 
at March 31, 1998, have not changed significantly since December 31, 
1997.  There are no significant commitments for capital expenditures 
at March 31, 1998.

                                  9

<PAGE>   10

PART II - OTHER INFORMATION

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

          a. Exhibits
<TABLE>
<CAPTION>
                                                          Sequentially
             Exhibit                                        Numbered
             Number                    Exhibit                Page
             ------  -------------------------------------  --------
              <S>    <C>                                       <C>
              (27)   Financial Data Schedule..............     11
</TABLE>
          b. Reports on Form 8-K -- There were no reports on Form 8-K 
             filed for the three months ended March 31, 1998.

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.

                                PAUL MUELLER COMPANY

DATE:  May 7, 1998              /S/         DONALD E. GOLIK
       -----------              --------------------------------------
                                Donald E. Golik, Senior Vice President 
                                      and Chief Financial Officer

                                  10