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 QUARTERLY PERIOD ENDED  OCTOBER 4, 1998

[ ] 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  1-2451

                        NATIONAL PRESTO INDUSTRIES, INC.
             (Exact name of registrant as specified in its charter)

          WISCONSIN                                        39-0494170
(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                             Identification No.)

3925 NORTH HASTINGS WAY
EAU CLAIRE, WISCONSIN                                      54703-3703
(Address of principal executive offices)                   (Zip Code)


(Registrant's telephone number, including area code)       715-839-2121

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 [ ]


There were 7,358,590 shares of the Issuer's Common Stock outstanding as of the
close of the period covered by this report.

<PAGE>


NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
October 4, 1998 and December 31, 1997
(Unaudited)
(Dollars in thousands)

<TABLE>
<CAPTION>

                                                               1998                          1997
---------------------------------------------------------------------------------------------------
<S>                                            <C>          <C>                <C>         <C>

ASSETS
   CURRENT ASSETS:
         Cash and cash equivalents                          $ 93,627                       $ 91,639
                                                                         
         Marketable securities                               122,430                        140,651
                                                                         
         Accounts receivable, net                             14,420                         20,242
                                                                         
         Inventories:                                                    
            Finished goods                     $ 19,232                       $  9,058
                                                                         
            Work in process                       2,953                          1,675
                                                                         
            Raw materials                         5,073                          6,900
                                                                         
            Supplies                                954       28,212             1,000       18,633
                                               --------                        --------
         Prepaid expenses                                        736                            918
                                                            --------                       --------
            Total current assets                             259,425                        272,083
                                                                         
   PROPERTY,  PLANT AND EQUIPMENT:               22,456                         20,008
                                                                         
            Less allowance for depreciation      12,511        9,945            11,002        9,006
                                               --------                        --------
   OTHER ASSETS                                               10,855                         10,781
                                                            --------                       --------
                                                            $280,225                       $291,870
                                                            ========                       ========
</TABLE>

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


<PAGE>

NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
October 4, 1998 and December 31, 1997
(Unaudited)
(Dollars in thousands)

<TABLE>
<CAPTION>

                                                              1998                          1997
---------------------------------------------------------------------------------------------------
<S>                                            <C>         <C>                <C>          <C>

LIABILITIES
   CURRENT LIABILITIES:
         Accounts payable                                  $ 10,985                        $ 15,958

         Federal and state income taxes                       2,268                           4,923

         Accrued liabilities                                 23,032                          21,791
                                                           --------                        --------
            Total current liabilities                        36,285                          42,672

COMMITMENTS AND CONTINGENCIES                                   -                               -


STOCKHOLDERS' EQUITY

         Common stock, $1 par value:
            Authorized: 12,000,000 shares
            Issued: 7,440,518 shares           $ 7,441                        $  7,441

         Paid-in capital                           976                             925

         Retained earnings                     237,687                         243,092
                                              --------                        --------
                                               246,104                         251,458

         Treasury stock, at cost                 2,164                           2,260
                                              --------                        --------
               Total stockholders' equity                   243,940                         249,198
                                                           --------                        --------
                                                           $280,225                        $291,870
                                                           ========                        ========

</TABLE>

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


<PAGE>

NATIONAL PRESTO INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
Three Months and Nine Months ended October 4, 1998 and October 5, 1997
(Unaudited)
(In thousands except per share data)
<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED  NINE MONTHS ENDED
                                                     ------------------  -----------------
                                                       1998      1997      1998      1997
------------------------------------------------------------------------------------------
<S>                                                  <C>       <C>       <C>       <C>    
Net sales                                            $24,306   $24,917   $59,565   $59,734

Cost of sales                                         16,125    16,646    41,752    42,600
                                                     -------   -------   -------   -------
      Gross profit                                     8,181     8,271    17,813    17,134

Selling and general expenses                           5,516     6,121    13,589    14,552
                                                     -------   -------   -------   -------
      Operating profit                                 2,665     2,150     4,224     2,582

Other income, principally interest                     2,153     2,249     6,883     7,037

Other, principally litgation judgments/settlements      --        --        --         550
                                                     -------   -------   -------   -------
  Earnings before provision for income taxes           4,818     4,399    11,107    10,169

Provision for income taxes                             1,083       896     1,802     1,448
                                                     -------   -------   -------   -------
    Net earnings                                     $ 3,735   $ 3,503   $ 9,305   $ 8,721
                                                     =======   =======   =======   =======

Weighted average shares outstanding:
                  Basic                                7,357     7,354     7,357     7,354
                                                     =======   =======   =======   =======
                  Diluted                              7,358     7,355     7,358     7,355
                                                     =======   =======   =======   =======
Net earnings per share:
                  Basic                              $  0.50   $  0.48   $  1.26   $  1.19
                                                     =======   =======   =======   =======
                  Diluted                            $  0.50   $  0.48   $  1.26   $  1.19
                                                     =======   =======   =======   =======
Cash dividends declared and paid per common share    $  --     $  --     $  2.00   $  2.00
                                                     =======   =======   =======   =======

</TABLE>
The accompanying notes are an integral part of the financial statements.

<PAGE>


NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months ended October 4, 1998 and October 5, 1997
(Unaudited)
(Dollars in thousands)
                                                           1998        1997
--------------------------------------------------------------------------------
Cash flows from operating activities:

   Net earnings                                         $  9,305    $  8,721
   Adjustments to reconcile net earnings to net cash
      provided by operating activities:
      Provision for depreciation                           1,517       1,357
      Stock compensation expense                             122          67
      Changes in:
         Accounts receivable                               5,822       5,964
         Inventories                                      (9,579)     (9,793)
         Prepaid expenses                                    182         (22)
         Accounts payable and accrued liabilities         (3,732)       (794)
         Federal and state income taxes                   (2,655)     (3,037)
                                                        --------    --------
            Net cash provided by operating activities        982       2,463
                                                        --------    --------
Cash flows from investing activities:
   Marketable securities purchased                       (76,316)    (60,023)
   Marketable securities - maturities and sales           94,537      73,159
   Acquisition of property, plant and equipment           (2,456)     (2,917)
   Other                                                     (74)         26
                                                        --------    --------
            Net cash provided by investing activities     15,691      10,245
                                                        --------    --------
Cash flows from financing activities:
   Dividends paid                                        (14,710)    (14,706)
   Other                                                      25         (11)
                                                        --------    --------
            Net cash used in financing activities        (14,685)    (14,717)
                                                        --------    --------
Net increase (decrease) in cash and cash equivalents       1,988      (2,009)
Cash and cash equivalents at beginning of period          91,639      91,878
                                                        --------    --------
Cash and cash equivalents at end of period              $ 93,627    $ 89,869
                                                        ========    ========


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


<PAGE>


                  NATIONAL PRESTO INDUSTRIES, INC., AND SUBSIDIARIES

                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE A - EARNINGS PER SHARE

The Company's basic net earnings per share amounts have been computed by
dividing net earnings by the weighted average number of outstanding common
shares. The Company's diluted net earnings per share is computed by dividing net
earnings by the weighted average number of outstanding common shares and common
share equivalents relating to stock options, when dilutive.




--------------------------------------------------------------------------------
The foregoing information for the periods ended October 4, 1998, and October 5,
1997, is unaudited; however, in the opinion of management of the Registrant, it
reflects all the adjustments, which were of a normal recurring nature, necessary
for a fair statement of the results for the interim periods. The condensed
consolidated balance sheet as of December 31, 1997, is summarized from audited
consolidated financial statements, but does not include all the disclosures
contained therein and should be read in conjunction with the 1997 Annual Report.
Interim results for the period are not indicative of those for the year.


<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

         Comparison Third Quarter 1998 and 1997 

         Net sales were relatively flat at $24,306,000 versus $24,917,000 in the
prior year's comparable quarter.

         Gross margin as a percentage of sales was comparable to the prior year.

         The Company accrues unexpended advertising costs budgeted for the year
against each quarter's sales. Major advertising commitments are incurred in
advance of the expenditures, and the timing of sales through dealers and
distributors to the ultimate customer does not permit specific identification of
the customers' purchase to the actual time an advertisement appears. Advertising
charges included in selling expense in each quarter represent that percentage of
the annual advertising budget associated with that quarter's shipments.
Revisions to this budget result in periodic changes to the accrued liability for
committed advertising expenditures.

         Earnings before provision for income taxes increased $419,000 from
$4,399,000 to $4,818,000. The provision for income taxes increased from $896,000
to $1,083,000 and the effective income tax rate increased from 20% to 22%, as a
result of increased earnings subject to tax. Net earnings increased $232,000
from $3,503,000 to $3,735,000, or 7% and earnings per share increased from $.48
to $.50.

         The Company maintains adequate liquidity for all of its anticipated
capital requirements. As of quarter-end, there were no material capital
commitments outstanding.

         Forward looking statements in this Quarterly Report are made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. There are certain important factors that could cause results to differ
materially from historical results. Investors are cautioned that all forward
looking statements involve risks and uncertainty. The factors that could cause
actual results to differ materially are the following: consumer spending and
debt levels; interest rates; continuity of relationships with and purchases by
major customers; product mix; competitive pressure on sales and pricing, and
increases in material or production cost which cannot be recouped in product
pricing. Additional information concerning those and other factors is contained
in the Company's Securities and Exchange Commission filings, including but not
limited to the Form 10-K, copies of which are available from the Company without
charge.

<PAGE>


Comparison First Nine Months 1998 and 1997
         Net sales were flat when compared to the prior year's.

         Gross margins as a percentage of sales increased from 29% to 30%,
primarily due to higher efficiencies at the Company's manufacturing facilities.

         The accrual for unexpended advertising costs discussed in the Third
Quarter comparison also applies to the first nine months.

         Other income, principally interest, decreased from the 1997 level
primarily as a result of a lower level of invested funds at approximately the
same rate of return.

         Earnings before provision for income taxes increased $938,000 from
$10,169,000 to $11,107,000. The provision for income taxes increased from
$1,448,000 to $1,802,000 and the effective income tax rate increased from 14% to
16%, as a result of increased earnings subject to tax. Net earnings increased
$584,000 from $8,721,000 to $9,305,000, or 7% and earnings per share increased
from $1.19 to $1.26.


Year 2000 
         The year 2000 (Y2K) issue is the result of computer programs
using a two-digit format to indicate the year in any date. Computer systems with
such software will be unable to interpret dates beyond the year 1999, thus
causing computer errors which could lead to disruptions in operations. In 1997
the Company began the work necessary to address its Y2K exposure and focused
primarily on two areas:

         Internal Systems: During 1997 the Company began upgrading or replacing
its affected programs or systems to become Y2K compliant, and expects this
effort to be completed by March 31, 1999. The conversion costs have been
expensed as incurred, and are not considered material. At this time the Company
believes it is unnecessary to adopt a contingency plan, but as part of the
overall project will continue to assess the need for a contingency plan.

         External (Supplier) Systems: The Company has contacted critical
suppliers of products and services to assess whether the suppliers are Y2K
compliant or to monitor their progress toward Y2K compliance. The failure of any
key supplier to provide adequate responses as to their Y2K readiness will result
in the Company's developing contingency plans at that time, including use of
alternate suppliers. However, there can be no absolute assurance that suppliers
and others will timely resolve their own Y2K compliance issues.



<PAGE>

                           PART II - OTHER INFORMATION
                           ---------------------------

Item 5.  Other Information

         Since publication of the Company's proxy statement for its 1998 Annual
         Meeting of Stockholders, the Securities and Exchange Commission has
         amended its Rules 14a-4 and 14a-5(e), which govern the use by the
         Company of its discretionary voting authority with respect to certain
         shareholder proposals. Pursuant to these amendments, should the Company
         receive notice after February 17, 1999, of any such stockholder
         proposal which will be circulated independent of the Company's proxy
         statement, the persons named in proxies solicited by the Board of
         Directors of the Company for its 1999 Annual Meeting of Stockholders
         may exercise discretionary voting power with respect to any such
         proposal.

Item 6.  Exhibits and Reports on Form 8-K

         (a) Exhibits:
                Exhibit 3 (i) - Restated Articles of Incorporation - 
                                  incorporated by reference from Exhibit 3 (i) 
                                  of the Company's quarterly report on Form 10-Q
                                  for the quarter ended July 6, 1997
                              

                          (ii)- By-Laws - incorporated by reference from Exhibit
                                  3 (ii) of the Company's quarterly report on 
                                  Form 10-Q for the quarter ended July 6, 1997

                Exhibit 9 -     Voting Trust Agreement  - incorporated by 
                                  reference from Exhibit 9 of the Company's
                                  quarterly report on Form 10-Q for the quarter
                                  ended July 6, 1997
                Exhibit 10.1 -  1988 Stock Option Plan  - incorporated by 
                                  reference from Exhibit 10.1 of the Company's
                                  quarterly report on Form 10-Q for the quarter
                                  ended July 6, 1997
                Exhibit 10.2 -  Form of Incentive Stock Option Agreement under 
                                  the 1988 Stock Option Plan - incorporated by
                                  reference from Exhibit 10.2 of the Company's
                                  quarterly report on Form 10-Q for the quarter
                                  ended July 6, 1997
                Exhibit 11 -    Statement regarding computation of per share
                                  earnings
                Exhibit 27 -    Financial Data Schedule


         (b) Reports on Form 8-K:
                None


                                   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.


                                        NATIONAL PRESTO INDUSTRIES, INC.
                                        ----------------------------------------


         Date: November 5, 1998                                  /S/ M. J. Cohen
                                        ----------------------------------------
                                        M. J. Cohen, President
                                        (Principal operating officer)


         Date: November 5, 1998                                 /S/ R. F. Lieble
                                        ----------------------------------------
                                        R. F. Lieble, Treasurer
                                        (Principal accounting officer)


<PAGE>

                        National Presto Industries, Inc.
                                 Exhibit Index




            Exhibit
             Number                  Exhibit Description
             ------                  -------------------


               11              Computation of Earnings per Share

               27              Financial Data Schedule