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 Quarterly Period Ended March 31, 1998, 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 No. 1-500

                              PORTEC, Inc.
          (Exact name of Registrant as specified in its charter)

     Delaware                                     36-1637250
(State or other jurisdiction of              (I.R.S. Employer
incorporation or organization)               Identification No.)

One Hundred Field Drive, Suite 120, Lake Forest, Illinois 60045
(Address of principal executive offices)       (Zip Code)

                              (847) 735-2800
          (Registrant's telephone number, including area code)

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

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              NO      X   

Number of shares of Registrant's Common Stock ($1 per share par value) issued
and outstanding at May 12, 1998 - 4,455,954. 





<TABLE>
<S><C>
                                     PART I
                              FINANCIAL INFORMATION

Item 1:  Financial Statements

                     PORTEC, INC. CONSOLIDATED BALANCE SHEET
           AS OF MARCH 31, 1998; DECEMBER 31, 1997; AND MARCH 31, 1997
                             (THOUSANDS OF DOLLARS)

                               Unaudited             Unaudited
                                3/31/98   12/31/97    3/31/97 
CURRENT ASSETS
 Cash and cash equivalents
                                $47,168    $46,799    $ 4,582
 Accounts and notes receivable,   5,187      6,070     17,356 
 Inventories                      3,064      3,488     18,460 
 Other current assets               172        280        266 
 Deferred income tax benefits       745        745      3,286
  Total current assets           56,336     57,382     43,950 
PROPERTY, PLANT AND EQUIPMENT 
 Land                                43         43        220 
 Buildings and improvements       2,996      2,997     10,892 
 Machinery and equipment          4,774      4,737     23,234
                                  7,813      7,777     34,346
 Less accumulated depreciation   (4,004)   (3,859)    (20,093)

Total property, plant and equip.  3,809     3,918      14,253 
Assets Held For Sale                  -       -         2,070 
Intangible Assets                 2,615     2,673       4,857 
Notes Receivable and Other Assets   200       303       2,311 
Deferred Income Tax Benefit         182       182         - 
  Total                     $    63,142 $  64,458  $   67,441  

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES 
Current portion of long-term debt$2,300  $ 2,300   $       46 
 Accounts payable                 1,275    1,335        7,166 
 Other accrued liabilities        4,114    5,132        7,770 
 Income taxes payable               469    4,913          514 
   Total current liabilities      8,158   13,680       15,496 

LONG-TERM DEBT                    3,500      -         12,852 

OTHER LONG-TERM LIABILITIES 
 Pensions                         1,060      1,060      1,868 
 Deferred income tax                  -          -      1,220 
 Other                                -        202        584
Total
other long-term liabilities       1,060      1,262      3,672 

STOCKHOLDERS' EQUITY 
Common stock, $1 par value;
authorized - 10,000,000 shares;
issued - 4,455,954, 4,428,108
and 4,373,596 shares, respectively 4,456     4,428       4,374
Additional capital                47,508     47,260     46,880 
Cumulative translation adjustment    -          -         (295)
Accumulated deficit               (1,540)    (2,070)   (15,537)
                                   50,424     49,618     35,422 
Treasury stock - 0, 9,544 and 44 shares,
 respectively, at cost                -        (102)       (1)

  Total stockholders' equity      50,424      49,516    35,421 

  Total                          $63,142    $ 64,458   $67,441 


The accompanying notes are an integral part of these financial statements.




                                  PORTEC, INC.
            CONSOLIDATED STATEMENTS OF INCOME AND ACCUMULATED DEFICIT
          FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND MARCH 31, 1997
                  (THOUSANDS OF DOLLARS EXCEPT PER SHARE DATA)
                                   (UNAUDITED)




                                    Three Months Ended 3/31                     
                                          1998      1997   

Revenues  
 Net sales                              $  8,250 $  6,053  
 Other income (expense)                      635       22  
  Total                                    8,885    6,075  


Costs and expenses
 Cost of goods sold                        5,079     3,420 
 Selling, general and administrative       2,282     2,299 
 Interest                                     46       203  
  Total                                    7,407     5,922 


Income from continuing operations before
 provision for income taxes                1,478        153 

Income tax provision                         591        67 

Income from continuing operations            887        86 

Income from discontinued operations,
 net of taxes                                  -       695 
 
Net income                                   887       781 
Cash dividends paid                         (357)     (350)
Accumulated deficit - beginning of year   (2,070)  (15,968)
Accumulated deficit - end of period    $  (1,540)$ (15,537)

Dividends per common share                 $0.08     $0.08 

Earnings per share
 Basic
  Income from continuing operations        $0.20     $0.02 
  Income from discontinued operations          -     $0.12 
  Net income                               $0.20     $0.14 
  Weighted average shares outstanding  4,438,648 4,350,806 

Diluted
  Income from continuing operations        $0.19     $0.02 
  Income from discontinued operations          -     $0.12 
  Net income                               $0.19     $0.14 
  Weighted average shares outstanding  4,612,618 4,500,987 


The accompanying notes are an integral part of these financial statements.





                                  PORTEC, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
          FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND MARCH 31, 1997
                             (THOUSANDS OF DOLLARS)
                                   (UNAUDITED)


                                          3 MONTHS ENDED 3/31   

                                           1998               1997
Cash flows from Operating Activities:
 Net income                             $   887            $   781 
 Income from discontinued operations         -                 695
 Income from continuing operations          887                 86
 Adjustments to reconcile net income from
  continuing operations to net cash used
  by operating activities:
    Depreciation and amortization            204               179 
    Changes in other balance sheet accounts:
     Decrease (increase) in receivables      883              (189)
     Decrease (increase) in inventories      424              (762)
     Decrease in other current assets        108               195 
     Increase (decrease) in accounts payable
      and accruals                         (5,772)             296 
     Decrease (increase) in other assets net of
      other liabilities                       305              (55)
       Net cash used by operating
       activities of continuing operations  (2,961)           (250)

Cash Flows from Investing Activities:
 Capital Expenditures                          (36)           (209)
  Net cash used by investing activities
   of continuing operations                    (36)           (209)

Cash Flows from Financing Activities:
 Proceeds from revolving
  credit agreement                            3,500           2,100 
 Issuance of common stock                        223            - 
 Purchase of treasury stock                       -           (270)
 Payment of cash dividends                      (357)         (350)
  Net cash provided by financing activities
   of continuing operations                     3,366        1,480 

Cash Flows from Discontinued Operations           -           (624)

Net Increase in Cash and Cash Equivalents        369           397 
Cash and Cash Equivalents at Beginning of Year 46,799         4,679 
Cash and Cash Equivalents at End of Year       47,168         5,076 


The accompanying notes are an integral part of these financial statements.











                                  PORTEC, INC.
                  NOTES TO FINANCIAL STATEMENT - MARCH 31, 1998
                             (THOUSANDS OF DOLLARS)




1.  Financial statements for the three  months ended March 31, 1998  are subject
    to audit adjustments.


2.  Inventories at March 31, 1998; December 31, 1997; and March 31, 1997 were:


                                  3/31/98            12/31/97        3/31/97

     Raw Materials and Supplies   $1,591              1,648      $   6,596
     Work-in-Process                 933              1,288          4,682
     Finished Goods                  540                552          7,182
                            $      3,064   $          3,488      $  18,460



3.  The accompanying  financial statements reflect  all adjustments which  were,
    in the opinion of
    management, necessary for  a fair statement  of the results  for the  period
    presented, and all
    of  these  adjustments  were  of  a  normal  recurring  nature.    For  full
    disclosure of significant
    accounting policies, see Note 1 of the PORTEC, Inc. 1997 Annual Report.


</TABLE>                              

  
ITEM 2.  Management's Discussion and Analysis of Financial
        Condition and Results of Operations

In March 1998, the Company announced an agreement to merge  with MHD Acquisition
Corp.  The merger is subject  to stockholder approval, and a special  meeting of
stockholders  is scheduled to  be held on May  28, 1998 to  vote on the proposed
transaction.

On  December 3, 1997, the  Company announced that  it had completed  the sale of
substantially all of the assets  of its Construction Equipment segment  for cash
and the assumption of  all significant related liabilities.  The Company further
announced on December 11, 1997,  that all of the assets of the Railroad Products
segment  were sold for  cash and the assumption  of all significant liabilities.
The  Consolidated Statements of Income  and the Consolidated  Statements of Cash
Flow for  the quarter  ended March 31,  1997 have been  restated to  include the
Company's  former  Construction  Equipment  and Railroad  Products  segments  as
discontinued operations.  Significant fluctuations in Consolidated Balance Sheet
data from March 31, 1997 to March 31, 1998, unless otherwise addressed, were due
to the disposal of the above two segments.

Net  sales for the  quarter ended March  31, 1998 were  $8,250,000 compared with
$6,053,000 for  the same period  in 1997.   The  increase in net  sales of  36.3
percent during  the first quarter  of 1998 was  due to significant  increases in
shipments of a U.S. Postal project,<PAGE>
traditional power turns and recycling
conveyors and systems.

Income  from continuing  operations  before tax  was  $1,478,000 for  the  first
quarter of 1998  compared with $153,000  for the quarter  ended March 31,  1997.
The  increase of  $1,325,000 reflected  the higher  sales volume,  greater other
income and  reduced interest expense.   The significant  change in  gross margin
from the first quarter of 1997 to the first quarter of 1998 was the result of  a
shift in product  mix.  Other income included $661,000  in interest income while
interest expense was down  $157,000.  The change in net interest  was due to the
investment of proceeds from  the sale of discontinued operations.   Discontinued
operations contributed income net of taxes of $695,000  during the first quarter
of 1997.

Net income  for the quarter  ended March 31,  1998 of $887,000  was 13.6 percent
above the $781,000 reported for the same period last year.     

Accounts receivable decreased $883,000 from December 31, 1997 to  March 31, 1998
as  a result  of the  collection of  receivables owed  to the  Company from  the
purchasers of the  two discontinued  business segments.   Inventories  decreased
$424,000  during the  same quarter  due  to the  shipment of  a large  recycling
system.   Fixed asset acquisitions were $36,000 during the first quarter of 1998
versus $209,000 for the same period last year.  

Other  accrued liabilities  decreased  $1,018,000 primarily  as  a result  of  a
reduction  in customer  deposits and  the  contribution by  the  Company to  the
Savings  and Investment  Plan for  company employees.   Income  tax payable  was
reduced by the payment of estimated taxes on the  gain recognized on the sale of
the discontinued operations.  The increase in long-term debt  of $3,500,000 from
year end was used to pay taxes.  

The increase in stockholders' equity of $908,000 from December 31, 1997 to March
31, 1998 was attributable to earnings  and the contribution of treasury stock to
the  Savings and Investment  Plan for company  employees.   These increases were
partially offset by the payment of a cash dividend  of $357,000 during the first
quarter of 1998.

The  Company received new orders of $5,804,000  during the first quarter of 1998
compared with  $11,650,000 for  the first  quarter of 1997.   During  the period
ended March 31,  1997, the  Company received  a large  order for  a U.S.  Postal
project and a  recycling system.  The order backlog was  $6,804,000 at March 31,
1998 compared with $9,325,000 and $11,979,000 at December 31, 1997 and March 31,
1997, respectively.


Liquidity

On  February 12,  1993, the  Company entered  into a  credit agreement  with the
American National Bank and Trust  Company of Chicago which was amended  on April
26, 1994, June 13, 1995 and June 2, 1997.   The amended agreement provides up to
$17,000,000  of credit  available as  either  cash or  letters of  credit.   The
provisions  of the agreement  include restrictive covenants  relating to minimum
net  worth,  interest   coverage,  net  working   capital  and  leverage   ratio
requirements and limit cash dividend payments and additional indebtedness.

The  Company does not have available lines  of credit beyond its existing credit
agreement and is prohibited by the agreement from making other borrowings.

Management believes  its  existing  line of  credit  and  anticipated  operating
results will provide  the Company with sufficient funds for  working capital and
capital expenditures in  the normal course of  business.  The Company's  working
capital ratios were 6.9, 4.2  and 2.8 to 1 at March 31, 1998,  December 31, 1997
and March 31, 1997, respectively.  At  March 31, 1998, the Company had available
$10,949,000 of  unused credit  under  its loan  agreement,  plus cash  and  cash
equivalents  of  $47,168,000  compared with  $14,749,000  of  unused credit  and
$46,799,000 of cash and cash equivalents at December 31, 1997.

PART II - OTHER INFORMATION


ITEM 6                      EXHIBITS AND REPORTS ON FORM 8-K

    (a)  Exhibits:

                            11  The Company's statement regarding computation of
per share earnings.

    (b)                     Reports on Form 8-K

                            During the quarter ended March 31, 1998, the Company
                            issued  a  Form 8-K  Report  dated  March  11, 1998,
announcing that it had entered into an Agreement and Plan of Merger with  MHD 
Acquisition Corp., an affiliate of J Richard Industries, L.P.


                                    SIGNATURE

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.


                                             PORTEC, Inc.          
                                                          Registrant



Dated:  May 14, 1998                 By:                            
                                                     Nancy A. Kindl
                                                     Vice President, Treasurer,
                                                     Secretary and Chief 
Financial Officer
















                                 EXHIBIT  INDEX

                                                            Page No.
                                                         Within
                                                     Sequential
                                                      Numbering
                                                      System of
                                                        Exhibit

Exhibit                  Description

11                Registrant's statement regarding
                 computation of per share earnings       11






































                                                           Exhibit 6(a) 11

 

                                  PORTEC, Inc.

                   COMPUTATION OF NEW INCOME PER COMMON SHARE


                                                     THREE MONTHS
                                                    ENDED MARCH 31,       


                                                1998           1997


Income from continuing operations          $ 887,000       $  86,000
Income from discontinued operations               -          695,000
Net income                                   887,000         781,000


Basic

Weighted Average Shares Outstanding      4,438,648         4,350,805

Income from continuing operations      $     .20        $     .02
Income from discontinued operations          -                .12
Net income                                   .20              .14

Diluted

Weighted Average Shares Outstanding    4,612,618         4,500,987

Income from continuing operations      $     .19       $       .02
Income  from   discontinued
operations                                    -                .12
Net income                                  .19                .14