FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C.  20549 

(Mark One)

[X]     Quarterly Report Pursuant to Section 13 or 15(d) of the
        Securities Exchange Act of 1934 

For the quarterly period ended September 30, 1997.

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. 0-10894

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

         Pennsylvania                       23-2200465        
(State or other jurisdiction of           (IRS Employer
incorporation or organization)           Identification No.)

            625 South Fifth Avenue, Lebanon, Pennsylvania        
              (Address of principal executive offices)            

                              17042  
                           (Zip Code)

                         (717) 274-2521                          
         (Registrant's telephone number, including area code)


                           No Change                             
       (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    X        No        

     Common Stock, par value $1.00 per share:  25,884,126 shares outstanding 
(excluding treasury shares) as of November 10, 1997.

PART I.  FINANCIAL INFORMATION 

Item 1.     Financial Statements.  

Condensed Consolidated Balance Sheets - September 30, 1997 
     (Unaudited)                          and December 31, 1996

Condensed Consolidated Statements of 
     Income (Three and Nine Month      
     Periods - Unaudited)              - September 30, 1997 and
                                              1996

Condensed Consolidated Statements of 
     Cash Flows (Nine Month 
     Periods - Unaudited)                - September 30, 1997 and
                                              1996

Notes to Condensed Consolidated Financial Statements

                       ARNOLD INDUSTRIES, INC.
              CONDENSED CONSOLIDATED BALANCE SHEETS
                        (Unaudited)
                                             September 30,     December 31,
                                                 1997             1996    
ASSETS
     Current Assets
       Cash and Cash Equivalents                30,131,747      19,704,303
       Marketable Securities                     9,436,789      21,917,940
       Accounts Receivable, Net                 40,954,130      30,648,955
       Deferred Income Taxes                     5,965,078       7,649,269
       Prepaid Expenses and Supplies             4,225,090       3,764,475
       Refundable Income Taxes                     417,642             -0-
          Total Current Assets                  91,130,476      83,684,942

     Property and Equipment                    338,316,841     322,812,162
     Less:  Accumulated Depreciation           136,673,101     123,198,243
          Total Property and Equipmen          201,643,740     199,613,919

     Other Assets
       Goodwill                                  8,585,825       8,862,555
       Investments in Limited Partnerships       9,745,082      10,144,793
       Other                                       997,733         806,213
          Total Other Assets                    19,328,640      19,813,561

          TOTAL ASSETS                         312,102,856     303,112,422

LIABILITIES AND STOCKHOLDERS' EQUITY
     Current Liabilities
       Notes Payable                            16,222,367      16,222,367
       Accounts Payable                         14,739,327       9,332,066
       Income Taxes                                    -0-         456,332
       Estimated Liability for Claims            6,163,724       6,451,931
       Accrued Expenses - Other                 13,226,699      11,313,407
          Total Current Liabilities             50,352,117      43,776,103

     Long-Term Liabilities
       Estimated Liability for Claims           13,689,000      13,689,000
       Deferred Income Taxes                    30,604,271      31,095,222
       Notes Payable                             2,363,971       3,873,696
       Other                                     1,639,357       1,531,707
          Total Long-Term Liabilities           48,296,599      50,189,625

     Stockholders' Equity
       Common Stock                             29,942,628      29,942,628
       Paid-In Capital                             299,898         209,000
       Retained Earnings                       205,133,373     187,922,593
       Treasury Stock - At Cost                (21,921,759)     (8,927,527)
          Total Stockholders' Equity           213,454,140     209,146,694
          TOTAL LIABILITIES AND
          STOCKHOLDERS' EQUITY                 312,102,856     303,112,422

         The accompanying notes, herein following, are an integral part
         of these consolidated financial statements.


                             ARNOLD INDUSTRIES, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                               (Unaudited)


                          Nine months Ended          Three Months Ended
                            September 30,              September 30,
                          1997          1996          1997       1996

Operating Revenues     287,054,643  263,945,347   99,174,677  91,442,677

Operating Expenses     246,168,884  233,306,958   84,887,852  80,504,984
     
Operating Income        40,885,759   30,638,389   14,286,825  10,937,693
                         
Interest Expense          (975,794)    (931,207)    (324,595)   (300,563)

Other Income               972,178      254,965      427,850     475,936

Income Before 
     Income Taxes       40,882,143   29,962,147   14,390,080  11,113,066

Income Taxes            15,002,844   10,636,746    5,342,186   3,984,743

Net Income              25,879,299   19,325,401    9,047,894   7,128,323


Weighted Average Shares 
     Outstanding (Note) 26,267,854   26,653,706   25,866,908  26,656,553

Income per Common 
     Share (Note)              .99          .73          .35         .27

Dividends per Common Share     .33          .33          .11         .11 



NOTE:   Common share equivalents are not included since the effect of their
        inclusion is not material.

        In February 1997, the Financial Accounting Standards Board issued
        Statement of Financial Accounting Standards No. 128 "Earnings Per 
        Share" (SFAS 128).  SFAS 128 establishes standards for computing 
        and presenting earnings per share and applies to entities with 
        publicly held common stock or potential common stock.  SFAS 128 
        simplifies the standards for computing earnings per share previously
        found in APB Opinion No. 15, "Earnings Per Share," by replacing the 
        presentation of primary earnings per share with a presentation of 
        basic earnings per share.  It also requires dual presentation of 
        basic and diluted earnings per share on the face of the income 
        statement for all entities with complex capital structures.

        SFAS 128 is effective for financial statements issued for periods
        ending after December 15, 1997.  The effect of SFAS 128 on the 
        Company's earnings per share has not been determined.

            The accompanying notes, herein following, are an integral part
            of these consolidated financial statements.

                                  ARNOLD INDUSTRIES, INC.
                   CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                      (Unaudited)


                                                        Nine months Ended
                                                         September 30,
                                                     1997             1996    
Operating Activities
  Net Income                                       25,879,299      19,325,401
  Adjustments to Reconcile Net Income to Net
    Cash Provided by Operating Activities:
      Depreciation and Amortization                22,004,132      21,065,960
      Provision for Deferred Taxes                  1,193,241       2,463,037
      Other                                          (333,238)       (250,284)
      Changes in Operating Assets and Liabilities:
        (Increase) in Accounts Receivable         (10,305,175)     (2,912,855)
        (Increase) Decrease in Prepaid 
           Expenses and Supplies                     (460,615)        204,433
        Increase in Accounts Payable 
           and Accrued Expenses                     6,158,372       8,105,015
        Other                                         107,650          98,900
           Net Cash Provided by Operating 
           Activities                              44,243,666      48,099,607

Investing Activities
  Proceeds from Sale of Investment Securities      18,953,056       2,483,302
  Purchase of Investment Securities                (6,497,462)    (12,774,162)
  Proceeds from Disposition of Property and 
     Equipment                                      3,039,309       3,678,625
  Purchase of Property and Equipment              (26,080,372)    (22,687,390)
  Capital Contributions to Limited Partnerships    (1,586,963)       (657,223)
  Other                                              (149,174)         29,032
           Net Cash Used In Investing Activities  (12,321,606)    (29,927,816)

Financing Activities
  Cash Dividends Paid                              (8,668,521)     (8,795,596)
  Purchase of Treasury Stock                      (13,064,377)             -0-
  Other                                               238,282          60,845
           Net Cash Used In Financing Activities  (21,494,616)     (8,734,751)
     
Increase in Cash and Cash Equivalents              10,427,444       9,437,040

Cash and Cash Equivalents at Beginning of Year     19,704,303       5,769,772

Cash and Cash Equivalents at End of Period         30,131,747      15,206,812



Supplemental Disclosures of Cash Flow Information:
     Cash paid during the period for:
          Interest                                    972,498         953,561
          Income Taxes                             14,619,874       8,330,379


               The accompanying notes, herein following, are an integral part
               of these consolidated financial statements.

  
                            ARNOLD INDUSTRIES, INC. 
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 (UNAUDITED)                   


Note I:     Basis of Presentation

     The financial information included herein is unaudited; however, 
such information reflects all adjustments (consisting solely of normal 
adjustments) which are, in the opinion of management, necessary for a 
fair statement of results for the interim period.  This financial 
information should be read in conjunction with the Financial Statements, 
Notes and information included in the Company's latest annual report on 
Form 10-K and any intervening reports.

     The results of operations for the three and nine-month periods ending 
September 30, 1997, and 1996 are not necessarily indicative of the results
to be expected for the full year.


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

     Operating Revenues on a consolidated basis for the third quarter of 1997
were $99,174,677, an increase of $7,732,000 or 8.5% over Operating Revenues 
for 1996's third quarter.  For the same period, Operating Expenses increased 
$4,382,868, or 5.4%; Income before Income Taxes increased $3,277,014, an 
increase of 29.5%; and Net Income increased $1,919,571, or 26.9%.  Earnings 
Per Share for the third quarter of 1997 increased as compared to the third 
quarter of 1996 from $.27 per share to $.35 per share, an increase of 29.6%.

     As indicated above, the Company's revenues for the third quarter of 1997 
were substantially ahead of revenues generated during the comparable period 
in 1996.  An increase of $6.3 million in third quarter revenues at the 
Company's subsidiary New Penn Motor Express, Inc. ("New Penn") was matched 
by a revenue increase of over $1.4 million at the Arnold Transportation 
subsidiaries, namely, Arnold Transportation Services, Inc. ("ATS")
(formerly LebArnold, Inc.), SilverEagle Transport, Inc. ("SilverEagle") 
and D.W. Freight, Inc. ("DW").  The revenue gains are attributable primarily 
to increased volume at all of the subsidiaries, except DW where revenues 
declined by 26%.

     Operating Income on a consolidated basis also increased during the 
third quarter of 1997 relative to the comparable period of 1996 in that 
mostly profitable Operating Revenues were added to the top line, resulting 
in increased profit to the bottom line.  Individually, Operating Income 
of New Penn and ATS increased during the third quarter in comparison to 
the same period in 1996, whereas operating income of SilverEagle and DW 
declined during the period.  The decline in Operating Income at SilverEagle 
and DW reflects the on-going price competition experienced throughout the 
truckload industry.

     The Company's combined Operating Revenues for the nine months ended 
September 30, 1997 were $287,054,643, an increase of $23,109,296, or 8.8% 
over the comparable nine-month period in 1996.  For the same period, 
Operating Expenses increased $12,861,926, or 5.5%; Income Before Income 
Taxes increased $10,919,996, an increase of 36.4%; and Net Income increased 
$6,553,898, or 33.9%.  Earnings Per Share increased from $.73 to $.99, or 
35.6% for the respective nine-month periods.  The increase in the Company's 
results of operations during the first nine months of 1997 is not necessarily 
indicative of an overall upward trend within the Company, but nevertheless 
is significant in light of the competitive pressures to which all motor 
carriers are subject.

     Set forth below is a schedule of the Unaudited Operating Revenues, 
Expenses and Operating Income of the LTL and TL companies for the third 
quarters of 1997 and 1996 and for the nine (9) month periods ended 
September 30, 1997, and September 30, 1996:

                                       (Dollars in Thousands)
                                  Third Quarter Ended September 30,
                                     1997                    1996
                                  Amount      %       Amount      %  
NEW PENN MOTOR EXPRESS
AND RELATED COMPANIES (LTL)
     Operating Revenues           53,506     100.0      47,220     100.0
     Operating Expenses           40,788      76.2      38,255      81.0
       Operating Income           12,718      23.8       8,965      19.0

ARNOLD TRANSPORTATION 
SERVICES (TL)
     Operating Revenues           45,669     100.0      44,223     100.0
     Operating Expenses           44,100      96.6      42,250      95.5
       Operating Income            1,569       3.4       1,973       4.5

                                       (Dollars in Thousands)
                                  Nine Months Ended September 30,
                                     1997                    1996
                                 Amount      %       Amount      %  
NEW PENN MOTOR EXPRESS
AND RELATED COMPANIES (LTL)
     Operating Revenues          153,816     100.0     134,207     100.0
     Operating Expenses          120,010      78.0     109,626      81.7
       Operating Income           33,806      22.0      24,581      18.3

ARNOLD TRANSPORTATION 
SERVICES (TL)
     Operating Revenues          133,238     100.0     129,738     100.0
     Operating Expenses          126,158      94.7     123,681      95.3
       Operating Income            7,080       5.3       6,057       4.7

     The Company's working capital at the end of the third quarter of 1997
was $40,778,359.  This represents an increase of $3,890,310 or 10.5% from 
the working capital at the end of the previous quarter in 1997.  The increase
in working capital reflects the Company's desire to husband assets to fund an
ongoing capital expansion program.

       The Company's investment in Property and Equipment (Less Accumulated 
Depreciation) as of the end of the third quarter of 1997 stood at 
$201,643,740.  This figure represents an increase from December 31, 1996 of 
$2,029,821, or 1.0% and reflects the ongoing results of the Company's 
capital expansion program.  Future funding for the Company's capital 
expansion program will likely be accomplished through the use of cash 
generated from current operating and investment activities, supplemented, 
when necessary, by short or long-term financing.  Management continues to 
seek opportunities for profitable expansion of the Company.

     On November 4, 1997, the Company announced its quarterly cash dividend 
of $.11 per share.


PART II.  OTHER INFORMATION 

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

          (a)     Exhibit 27 - Financial Data Schedule

          (b)     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.  


                              ARNOLD INDUSTRIES, INC.
                                   (Registrant)


Date:  November 14, 1997          By  /s/ Heath L. Allen
                                Heath L. Allen, Secretary



Date:  November 14, 1997              /s/ Ronald E. Walborn
                                Ronald E. Walborn, Treasurer