UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                    FORM 10-Q
                Quarterly report pursuant to section 13 or 15 (d)
                     of the Securities Exchange Act of 1934

For the quarter ended March 31, 1998             Commission file number 0-13875


                               LANCER CORPORATION
             (Exact name of registrant as specified in its charter)


                Texas                                            74-1591073
   (State or other jurisdiction of                            (IRS employer
   incorporation or organization)                          identification no.)

6655 Lancer Blvd., San Antonio, Texas                              78219
(Address of principal executive offices)                         (Zip Code)

       Registrant's telephone number, including area code: (210) 310-7000

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 14(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 each of the issuers of classes of
common stock, as of the latest practicable date.

                  Title                                Shares outstanding as of
                                                             May 12, 1998

Common stock, par value $.01 per share                         9,143,578



<PAGE>


Part I - Financial Information

Item 1 - Financial Statements

                       LANCER CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                     ASSETS
                                                                  March 31,                    December 31,
                                                                    1998                           1997
                                                             --------------------           --------------------
                                                                 (Unaudited)

Current assets:
<S>                                                        <C>                                <C>              
  Cash                                                     $           1,103,919              $       1,850,779
                                                             --------------------           --------------------
  Receivables:
    Trade accounts and notes                                          29,681,606                     22,674,269
    Refundable income taxes                                                1,483                          1,483
    Other                                                                219,436                        298,274
                                                             --------------------           --------------------
                                                                      29,902,525                     22,974,026
    Less allowance for doubtful accounts                                (335,000)                      (335,000)
                                                             --------------------           --------------------
      Net receivables                                                 29,567,525                     22,639,026
                                                             --------------------           --------------------

  Inventories                                                         45,026,942                     44,414,567
  Prepaid expenses                                                        45,043                        178,869
  Deferred tax asset                                                     227,076                        220,849
                                                             --------------------           --------------------
      Total current assets                                            75,970,505                     69,304,090
                                                             --------------------           --------------------

Property, plant and equipment, at cost:
  Land                                                                 1,259,938                      1,259,938
  Buildings                                                           18,326,647                     18,152,535
  Machinery and equipment                                             18,518,557                     17,839,310
  Tools and dies                                                       8,454,117                      8,454,022
  Leaseholds, office equipment and vehicles                            6,819,503                      6,776,193
  Construction in progress                                             2,421,504                      1,600,204
                                                             --------------------           --------------------
                                                                      55,800,266                     54,082,202
  Less accumulated depreciation and amortization                     (22,936,628)                   (22,186,770)
                                                             --------------------           --------------------
    Net property, plant and equipment                                 32,863,638                     31,895,432
                                                             --------------------           --------------------

Long-term receivables                                                    701,943                        724,959
Long-term investments                                                  3,246,085                      3,273,621
Intangibles and other assets,
   at cost, less accumulated amortization                              5,339,171                      5,470,886
                                                             --------------------           --------------------
                                                           $         118,121,342          $         110,668,988
                                                             ====================           ====================
</TABLE>

          See accompanying notes to consolidated financial statements.
                                       2

<PAGE>

<TABLE>
<CAPTION>

                       LANCER CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS (continued)

                      LIABILITIES AND SHAREHOLDERS' EQUITY


                                                                         March 31,                    December 31,
                                                                            1998                          1997
                                                                     -------------------           --------------------
                                                                        (Unaudited)
Current liabilities:
<S>                                                                <C>                           <C>                  
  Accounts payable                                                 $         15,159,013          $          12,133,894
  Current installments of long-term debt                                      3,822,200                      4,444,400
  Line of credit with bank                                                   21,500,000                     19,000,000
  Deferred licensing and maintenance fees                                       512,271                        538,554
  Accrued expenses and other liabilities                                      5,742,591                      5,718,003
  Income taxes payable                                                        1,222,480                        185,472
                                                                     -------------------           --------------------
    Total current liabilities                                                47,958,555                     42,020,323

Deferred tax liability                                                        2,008,638                      1,736,405
Other long-term liabilities                                                     820,000                        820,000
Long-term debt, excluding current installments                               20,840,350                     21,565,350
Long-term deferred licensing and maintenance fees                             1,315,597                      1,565,597
                                                                     -------------------           --------------------
    Total liabilities                                                        72,943,140                     67,707,675
                                                                     -------------------           --------------------

Shareholders' equity:
  Preferred stock, without par value:
   5,000,000 shares authorized; none issued                                     -                              -

  Common stock, $.01 par value:
   50,000,000 shares authorized;  8,926,311
   and 8,902,236 issued and outstanding
   in 1998 and 1997, respectively                                                89,263                         89,022

  Additional paid-in capital                                                 11,698,994                     11,607,504

  Accumulated other comprehensive loss -
    Cumulative translation adjustment                                        (1,728,189)                    (1,727,719)

  Retained earnings                                                          35,118,134                     32,992,506
                                                                     -------------------           --------------------
    Total shareholders' equity                                               45,178,202                     42,961,313
                                                                     -------------------           --------------------
                                                                   $        118,121,342          $         110,668,988
                                                                     ===================           ====================
</TABLE>


          See accompanying notes to consolidated financial statements.
                                       3

<PAGE>


                       LANCER CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                       Three Months Ended
                                                                March 31,              March 31,
                                                                   1998                   1997
                                                             -----------------      -----------------

<S>                                                               <C>                   <C>         
Net sales                                                         $36,319,755           $ 30,398,159
Cost of sales                                                      26,870,975             22,733,537
                                                             -----------------      -----------------
    Gross profit                                                    9,448,780              7,664,622

Selling, general and
   administrative expenses                                          4,997,909              4,220,650
                                                             -----------------      -----------------

    Operating income                                                4,450,871              3,443,972
                                                             -----------------      -----------------

Other income (expense):
  Interest expense                                                   (932,033)              (547,458)
  Other income (expense), net                                        (173,481)                16,369
                                                             -----------------      -----------------
                                                                   (1,105,514)              (531,089)
                                                             -----------------      -----------------
    Income before income taxes                                      3,345,357              2,912,883
                                                             -----------------      -----------------

Income tax expense:
  Current                                                             941,496              1,092,624
  Deferred                                                            278,233                 30,127
                                                             -----------------      -----------------
                                                                    1,219,729              1,122,751
                                                             -----------------      -----------------

    Net earnings                                                 $  2,125,628        $     1,790,132
                                                             =================      =================

Common Shares and Equivalents Outstanding:
Basic                                                               8,910,029              8,755,346
Diluted                                                             9,252,927              9,232,841

Earnings Per Share:
Basic                                                                 $  0.24                 $ 0.20
Diluted                                                               $  0.23                 $ 0.19
</TABLE>


          See accompanying notes to consolidated financial statements.
                                       4


4<PAGE>

<TABLE>
<CAPTION>
                                                                                 Three Months Ended
                                                                           March 31,                 March 31,
                                                                             1998                       1997
                                                                    ------------------------   -----------------------


<S>                                                                         <C>                       <C>             
Net earnings                                                                $     2,125,628           $     1,790,132
Adjustments to reconcile net earnings to net cash provided (used) by
  operating activities (net of effects from purchase of subsidiaries:)
     Depreciation and amortization                                                  791,135                   595,040
     Loss on sale and disposal of assets                                             13,327                         -
     Gain on investments in affiliates                                               27,536                   213,868
     Changes in assets and liabilities:
        Receivables                                                              (6,905,595)               (4,943,020)
        Refundable income taxes                                                           -                   399,417
        Prepaid expenses                                                            133,826                    64,569
        Deferred tax liability                                                       (6,227)                  (24,395)
        Inventories                                                                (654,305)               (1,041,343)
        Other assets                                                                 32,485                   110,365
        Accounts payable                                                          3,042,906                 3,619,698
        Accrued expenses and other liabilities                                       37,141                   (58,042)
        Income taxes payable                                                      1,033,339                   723,653
        Deferred license fees and other revenue                                    (273,690)                  (62,258)
        Other long-term liabilities                                                 272,233                         -
                                                                    ------------------------   -----------------------
Net cash provided (used) by operating activities                                  (330,261)                 1,387,684
                                                                    ------------------------   -----------------------


     Acquisition of property, plant and equipment                               (1,729,727)               (2,707,393)
     Acquisition of subsidiary companies                                                  -               (5,986,000)
     Additional investments in affiliates                                                 -                 (250,000)
                                                                    ------------------------   -----------------------
Net cash used in investing activities                                           (1,729,727)               (8,943,393)
                                                                    ------------------------   -----------------------
     Net borrowings under line of credit agreements                              2,500,000                 1,300,000
     Retirement of long-term debt                                               (1,347,200)                6,300,875
     Proceeds from exercise of stock options                                        91,731                   104,771
                                                                    ------------------------   -----------------------
Net cash provided by financing activities                                        1,244,531                 7,705,646
                                                                     -----------------------   -----------------------
Effect of exchange rate changes on cash                                             68,597                    17,261
                                                                     -----------------------   -----------------------
Net increase (decrease) in cash                                                   (746,860)                  167,198
Cash at beginning of year                                                        1,850,779                 1,016,426
                                                                     -----------------------   -----------------------
Cash at end of period                                                          $ 1,103,919               $ 1,183,624
                                                                     =======================   =======================

</TABLE>

          See accompanying notes to consolidated financial statements.
                                       5

<PAGE>


                       LANCER CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)



1.       Basis of Presentation

All  adjustments  (consisting of normal  recurring  adjustments)  have been made
which are necessary for a fair presentation of financial position and results of
operations.  All intercompany  balances and transactions have been eliminated in
consolidation.  It is suggested that the  consolidated  financial  statements be
read in conjunction with the consolidated financial statements and notes thereto
included in the December 31, 1997 Annual Report on Form 10-K.

Certain amounts in the  consolidated  financial  statements for prior years have
been reclassified to conform with the current year's presentation.


2.       Inventory Components

The  Company  uses the  gross  profit  method  to  determine  cost of sales  and
inventory for interim  periods.  Inventory  components  are  estimated  based on
various factors including historical  percentages and price increases.  Year end
inventory  adjustments are based upon valuation of ending  inventory.  Inventory
components are as follows:

<TABLE>
<CAPTION>

                                                  March 31,                    December 31,
                                                    1998                           1997
                                          --------------------------       ----------------------
<S>                                     <C>                              <C>                     
Finished Goods                          $                12,191,970      $             13,437,781
Work in process                                          28,469,094                   28,980,250
Raw material and supplies                                 4,365,878                    1,996,536
                                          --------------------------       ----------------------
                                        $                45,026,942      $            44,414,567
                                          ==========================       ======================
</TABLE>



3.       Earnings Per Share

The Company adopted the Statement of Financial  Accounting  Standards (SFAS) No.
128, "Earnings per Share", in 1997, and accordingly, basic earnings per share is
calculated  using the weighted  average number of common shares  outstanding and
diluted earnings per share is calculated  assuming the issuance of common shares
for all  potential  dilutive  common  shares  outstanding  during the  reporting
period.  The dilutive effect of stock options  approximated  342,898 and 477,495
shares for the three  months  ended  March 31, 1998 and 1997  respectively.  All
prior-period  earnings per share data  presented in the  consolidated  financial
statements have been restated to conform to the requirements of SFAS No. 128.

During 1997, the Company  declared a  three-for-two  stock split effected in the
form of dividends.  All references in the consolidated  financial  statements to
number of shares, per share amounts,  stock option data and market prices of the
Company's common stock have been restated to give effect to the stock split.


                                       6
<PAGE>



4.       Comprehensive Income

As of January  1,  1998,  the  Company  has  adopted  SFAS No.  130,  "Reporting
Comprehensive  Income."  SFAS 130  established  new rules for the  reporting and
display  of  comprehensive  income  and its  components.  The  adoption  of this
statement,  however,  has no impact on the Company's net income or stockholders'
equity.  SFAS 130  requires  that the  Company's  foreign  currency  translation
adjustments,   which  prior  to  the  adoption  were   reported   separately  in
stockholders' equity, be included in other comprehensive income.

The following are the components of comprehensive income:
<TABLE>
<CAPTION>

                                                              Three Months Ended
                                                     March 31, 1998          March 31, 1997
                                                  ---------------------     ------------------

<S>                                                 <C>                      <C>            
Net Earnings                                        $       2,125,628        $     1,790,132
Foreign currency translation loss                                (470)               (41,298)
                                                  ---------------------     ------------------
Comprehensive income                               $        2,125,158       $      1,748,834
                                                  =====================     ==================
</TABLE>


Accumulated  foreign  currency  translation   adjustments  on  the  accompanying
Consolidated Balance Sheets account for all of the Company's other comprehensive
income.

Item 2 - Management's Discussion and Analysis of Financial Condition and Results
         of Operations

This  document  contains  certain  "forward-looking"  statements as such term is
defined in the Private Securities  Litigation Reform Act of 1995 and information
relating to the Company  and its  subsidiaries  that are based on the beliefs of
the  Company's  management.  When used in this report,  the words  "anticipate,"
"believe,"  "estimate,"  "expect," "forecast," "plan," and "intend" and words or
phrases of similar import,  as they relate to the Company or its subsidiaries or
Company management,  are intended to identify forward-looking  statements.  Such
statements reflect the current risks,  uncertainties and assumptions which exist
or must be made as a result of certain factors  including,  without  limitation,
competitive   factors,   general  economic   conditions,   customer   relations,
relationships  with  vendors,   the  interest  rate  environment,   governmental
regulation  and  supervision,   seasonality,   distribution  networks,   product
introductions and acceptance, one-time events and other factors described herein
and in other  filings  made by the  Company  with the  Securities  and  Exchange
Commission.  Based  upon  changing  conditions,  should any one or more of these
risks or uncertainties  materialize,  or should any underlying assumptions prove
incorrect,  actual results may vary materially  from those  described  herein as
anticipated,  believed, estimated,  expected, forecast, planned or intended. The
Company does not intend to update these forward-looking statements.


Results of Operations

Comparison of the Three-Month Periods Ended March 31, 1998 and 1997

Net sales for the  quarter  ended  March 31,  1998 were $36.3  million,  a 19.5%
increase  over net sales in the first  quarter of 1997.  The  increase  reflects
strong sales results in North America,  Latin America and Europe, as well as the
inclusion  of Lancer's  subsidiary  in New  Zealand,  which was  acquired in the
second quarter of 1997. Sales to customers  outside the United States were 51.0%
of net sales in the first quarter of 1998, compared to 45.1% of net sales in the
same period last year.

Gross margin in the first quarter of 1998 was 26.0%,  up from 25.2% in the first
quarter of 1997.  The  Company's  emphasis  on  controlling  overhead  costs and
improving  manufacturing  efficiencies  contributed to the  improvement in gross
margin.

Selling,  general  and  administrative  expenses  were $5.0  million  during the
quarter ended March 31, 1998, an increase of $0.8  million,  or 18.4%,  from the
same period of 1997.  Expenses rose in support of the higher level of sales, and
because of the inclusion of Lancer's new operations in New Zealand and Belgium.

Interest  expense was $0.9  million in the first  quarter of 1998,  up from $0.5
million in the same period last year. The increased  interest expense was caused
by higher borrowings related to capital spending, acquisitions, and increases in
current assets during the past year.  Lancer's first quarter  effective tax rate
decreased to 36.5% in 1998 from 38.5% in 1997.  The  improvement in 1998 was due
to the absence of  nondeductible  losses from certain of the  Company's  foreign
subsidiaries.  Net earnings for the 1998 quarter were $2.1 million, up from $1.8
million in the first quarter of 1997.

                                       7

<PAGE>

Liquidity and Capital Resources

The Company's  principal sources of liquidity are cash flows from operations and
amounts available under the Company's  existing lines of credit. The Company has
met, and currently  expects that it will continue to meet,  substantially all of
its working capital and capital  expenditure  requirements,  as well as its debt
service requirements, with funds provided by operations and borrowings under its
credit facilities.

Net cash used in operating activities was $0.3 million in the three months ended
March  31,  1998,  compared  to $1.4  million  of  cash  provided  by  operating
activities in the same period of 1997.  Capital spending was $1.7 million in the
first quarter of 1998.  During the quarter,  Lancer completed  construction of a
32,000 square foot office addition to its primary  facility in San Antonio.  The
Company  funded the capital  expenditures  and the cash used in operations  with
borrowings under its credit facilities.

Accounting Matters

The  Company  maintains  a DISC in order to defer  income  taxes on its  foreign
sales. The Company continues to evaluate the benefit of converting the DISC to a
Foreign Sales Corporation.  At the time of such conversion,  the Company will be
required to provide for federal  income taxes on $2.4  million of  undistributed
earnings of the DISC. See 1997 10-K.

The Internal  Revenue  Service is examining the Company's U.S. income tax return
for 1995.  Management does not believe that any significant  adjustments will be
required.

Year 2000

In 1997, Lancer  implemented a BaaN ERP manufacturing  system which is year 2000
compliant.  The Company is also working with its vendors and processing banks to
ensure that their systems are year 2000  compliant.  The Company does not expect
to incur any additional material expenses relating to year 2000 compliance.

Part II - Other Information

Item 1 - Legal Proceedings

The Company is a party to various  lawsuits and claims  generally  incidental to
its business.  In the opinion of management and independent  legal counsel,  the
ultimate  disposition  of these  matters is not  expected to have a  significant
adverse effect on the Company's financial position or results of operations.

Item 5 - Other Information

John P. Herbots  resigned as the Company's  Chief  Financial  Officer  effective
April 17, 1998. The Company has not named a successor.

Item 6 - Exhibits and Reports on Form 8-K

         (a)      Exhibits:

                  None

         (b)      Reports on Form 8-K

                  None


                                       8
<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.

LANCER CORPORATION
(Registrant)



May 13, 1998                         By:  /s/ George F. Schroeder
                                          George F. Schroeder
                                          President and CEO



May 13, 1998                         By:  /s/ Christi A. Rohmer
                                          Christi A. Rohmer
                                          Controller






                                       9