THE SHAW GROUP

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Shaw Group Announces Record Earnings and Backlog for the Third Quarter Fiscal 2007
    --  Diluted earnings per share rise to $0.67
    --  Backlog totals $13.3 billion
    --  Operating cash flow remains strong

BATON ROUGE, La.--(BUSINESS WIRE)--Oct. 10, 2007--The Shaw Group Inc. (NYSE: SGR) today reported record net income for the three months ended May 31, 2007, of $54.6 million, or $0.67 per diluted share. The reported results include $5.7 million of net income, or $0.07 per diluted share, related to Shaw's investment in the Westinghouse segment. Excluding the Westinghouse segment, net income was $48.9 million, or $0.60 per diluted share.

Earnings before interest expense, income taxes, depreciation and amortization (EBITDA) for the third quarter of 2007 with the Westinghouse segment was $92.2 million, and $74.2 million excluding the Westinghouse segment. In comparison for the three months ended May 31, 2006, which was prior to the Westinghouse investment, Shaw reported a net loss before interest expense, taxes, depreciation and amortization of $15.7 million and a net loss of $16.7 million, or $0.21 per diluted share.

Third quarter operating cash flow totaled $131 million, bringing the nine months' operating cash flow to $285 million. Revenues for third quarter 2007 were $1.6 billion, compared to $1.2 billion in the corresponding 2006 period.

Shaw's backlog of unfilled orders at May 31, 2007, was a record $13.3 billion, up from approximately $8 billion at May 31, 2006. Approximately $5.6 billion, or 42 percent, of the backlog is expected to be converted to revenues during the next 12 months. Shaw also expects its backlog to grow to approximately $14.3 billion at August 31, 2007.

"Our business segments experienced strong revenue and profit growth compared to 2006, with the exception of the Environmental & Infrastructure Group, which executed significant amounts of disaster relief and emergency response services in 2006," said J.M. Bernhard Jr., Shaw's chairman, president and chief executive officer. "Our solid results were fueled by continued strength in the global markets for power generation capacity and petrochemicals processing.

"Our record backlog positions us well for fiscal 2008 and we believe the global markets we serve will remain strong throughout the year," said Bernhard. "Our operating segments are well positioned to benefit from this continued global economic expansion and we continue to believe there will be significant long-term growth in the developing nuclear power markets.

"By filing our third quarter 10-Q with the SEC, we are 'current' with the reporting of our fiscal 2007 financial results," Bernhard said. "Brian K. Ferraioli assumed the responsibility of chief financial officer today, and together with our entire financial reporting team, will continue improving our financial reporting processes."

A conference call to discuss the company's third quarter fiscal 2007 financial results will be held today, October 10, 2007, at 9:00 a.m. Eastern Time (8:00 a.m. Central Time). During that call, the company also intends to discuss guidance for fourth quarter fiscal 2007 as well as for fiscal 2008. A slide presentation outlining the third quarter fiscal 2007 earnings will be posted on the Investor Relations page of the Shaw Web site (www.shawgrp.com) approximately one hour before the conference call. A live audio webcast of the conference call will be available on the Investor Relations page of the company's Web site at www.shawgrp.com. A replay of the webcast will be available via the Company's Web site approximately one hour after the call has been completed. Interested individuals may also access a replay by dialing 800-633-8284 and using the reservation number: 2135-2483.

Calculation of EBITDA

The Shaw Group Inc. defines EBITDA as earnings before interest expense, income taxes, depreciation and amortization. EBITDA is an important financial measure used by The Shaw Group Inc. to assess performance. Although it is calculated using components derived from our GAAP financial statements, EBITDA itself is not a GAAP measure. A table reconciling EBITDA to its most directly comparable GAAP measure is included in the summarized financial information included in this release. Calculations of EBITDA should not be viewed as a substitute for calculations under GAAP, including cash flow from operations, operating income and net income. In addition, EBITDA calculations by one company may not be comparable to EBITDA calculations made by another company.

The Shaw Group Inc. is a leading global provider of engineering, procurement, construction, technology, maintenance, fabrication, manufacturing, consulting, remediation and facilities management services for government and private sector clients in the energy, chemical, environmental, infrastructure and emergency response markets. Headquartered in Baton Rouge, La., with nearly $5 billion in annual revenues, Shaw employs approximately 23,000 people at its offices and operations in North America, South America, Europe, the Middle East and the Asia-Pacific region. For further information, please visit Shaw's Web site at www.shawgrp.com.

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements. The statements contained herein that are not historical facts (including without limitation statements to the effect that the Company or its management "believes," "expects," "anticipates," "plans" or other similar expressions) and statements related to revenues, earnings, backlog, or other financial information or results are forward-looking statements based on the Company's current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting the Company will be those anticipated by the Company. These forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions and are subject to change based upon various factors. Should one or more of such risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in the forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. A description of some of the risks and uncertainties that could cause actual results to differ materially from such forward-looking statements can be found in the Company's reports and registration statements filed with the Securities and Exchange Commission, including its Form 10-K and Form 10-Q reports, and on the Company's Web site under the heading "Forward-Looking Statements." These documents are also available from the Securities and Exchange Commission or from the Investor Relations department of Shaw. For more information on the company and announcements it makes from time to time on a regional basis, visit our Web site at www.shawgrp.com.

                 THE SHAW GROUP INC. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                             (Unaudited)
               (In thousands, except per share amounts)
                       Three Months Ended May  Nine Months Ended May
                                 31,                     31,
                       -----------------------------------------------
                          2007        2006        2007        2006
                       ----------- ----------- ----------- -----------
Revenues               $1,601,436  $1,226,784  $4,080,347  $3,601,077
Cost of revenues        1,465,940   1,192,869   3,827,521   3,361,165
                       ----------- ----------- ----------- -----------
   Gross profit           135,496      33,915     252,826     239,912
General and
 administrative
 expenses                  68,455      52,248     204,073     162,052
                       ----------- ----------- ----------- -----------
Operating income
 (loss)                    67,041     (18,333)     48,753      77,860
Interest expense           (3,079)     (4,897)    (10,859)    (13,261)
Interest expense on
 Japanese Yen-
 denominated bonds
 including accretion
 and amortization          (8,543)          -     (21,992)          -
Interest income             3,006         794       7,896       4,273
Foreign currency
 translation gains on
 Japanese Yen-
 denominated bonds,
 net                       15,457           -      18,448           -
Other foreign currency
 translation gains
 (losses), net               (301)     (1,735)     (5,007)       (918)
Other income
 (expense), net               384         589      (1,019)       (291)
                       ----------- ----------- ----------- -----------
                            6,924      (5,249)    (12,533)    (10,197)
Income (loss) before
 income taxes,
 minority interest,
 earnings (losses)
 from unconsolidated
 entities and loss
 from and impairment
 of discontinued
 operations                73,965     (23,582)     36,220      67,663
Provision (benefit)
 for income taxes          15,707     (12,238)     18,013      19,151
                       ----------- ----------- ----------- -----------
Income (loss) before
 minority interest,
 earnings (losses)
 from unconsolidated
 entities and loss
 from and impairment
 of discontinued
 operations                58,258     (11,344)     18,207      48,512
Minority interest          (4,357)     (4,207)    (12,868)    (10,154)
Income from 20%
 Investment in
 Westinghouse, net of
 income taxes               1,625           -       1,457           -
Earnings (losses) from
 unconsolidated
 entities, net of
 income taxes                (787)       (463)    (25,596)        674
                       ----------- ----------- ----------- -----------
Income (loss) from
 continuing operations     54,739     (16,014)    (18,800)     39,032
Loss from and
 impairment of
 discontinued
 operations, net of
 income taxes                (121)       (659)     (3,156)     (1,154)
                       ----------- ----------- ----------- -----------
Net income (loss)      $   54,618  $  (16,673) $  (21,956) $   37,878
                       =========== =========== =========== ===========
Net income (loss) per
 common share:
 Basic:
  Income (loss) from
   continuing
   operations          $     0.68  $    (0.20) $    (0.24) $     0.49
  Loss from and
   impairment of
   discontinued
   operations, net of
   income taxes             (0.00)      (0.01)      (0.04)      (0.01)
                       ----------- ----------- ----------- -----------
   Net income (loss)   $     0.68  $    (0.21) $    (0.28) $     0.48
                       =========== =========== =========== ===========
 Diluted:
  Income (loss) from
   continuing
   operations          $     0.67  $    (0.20) $    (0.24) $     0.48
  Loss from and
   impairment of
   discontinued
   operations, net of
   income taxes             (0.00)      (0.01)      (0.04)      (0.01)
                       ----------- ----------- ----------- -----------
   Net income (loss)   $     0.67  $    (0.21) $    (0.28) $     0.47
                       =========== =========== =========== ===========
                 THE SHAW GROUP INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED BALANCE SHEETS
               (In thousands, except per share amounts)
                                          May 31, 2007 August 31, 2006
                                           (Unaudited)
                                          ----------------------------
                 ASSETS
Current assets:
    Cash and cash equivalents              $  179,963      $  154,837
    Restricted and escrowed cash               38,178          43,409
    Accounts receivable, including
     retainage, net                           707,485         740,920
    Inventories                               153,187         101,337
    Costs and estimated earnings in
     excess of billings on uncompleted
     contracts, including claims              403,048         455,819
    Deferred income taxes                      95,476          83,085
    Prepaid expenses and other current
     assets                                    47,867          99,253
                                          ------------ ---------------
        Total current assets                1,625,204       1,678,660
Investments in and advances to
 unconsolidated entities, joint ventures
 and limited partnerships                      40,182          52,048
Investment in Westinghouse                  1,093,478               -
Property and equipment, less accumulated
 depreciation of $190,541 at May 31, 2007
 and $166,220 at August 31, 2006              198,188         175,431
Goodwill                                      512,360         506,592
Other assets                                  141,114         116,403
                                          ------------ ---------------
                                           $3,610,526      $2,529,134
                                          ============ ===============
  LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
     Accounts payable                      $  491,312      $  483,002
     Accrued liabilities                      315,389         211,162
     Advanced billings and billings in
      excess of costs and estimated
      earnings on uncompleted contracts       415,577         316,674
     Contract liability adjustments               840           3,361
     Deferred revenue                           5,104          14,772
     Current maturities of long-term debt       8,790           2,456
     Short-term revolving lines of credit       2,838           5,526
     Short term debt                            3,106           1,895
     Current portion of obligations under
      capital leases                            2,194           1,811
                                          ------------ ---------------
        Total current liabilities           1,245,150       1,040,659
Revolving line of credit                            -         145,517
Long-term debt, less current maturities         8,566          24,584
Japanese Yen-denominated long-term bonds
 secured by Investment in Westinghouse,
 net                                        1,033,914               -
Obligations under capital leases, less
 current portion                                2,226           3,433
Deferred income taxes                          15,333          18,664
Interest rate swap contract on Japanese
 Yen-denominated bonds                          1,335               -
Other liabilities                              41,752          39,662
Minority interest                              19,766          13,408
Shareholders' equity
     Preferred Stock, no par value,
      20,000,000 shares authorized; no
      shares issued and outstanding                 -               -
     Common Stock, no par value,
      86,676,410 and 85,866,727 shares
      issued, respectively; and
      81,171,629 and 80,475,928 shares
      outstanding, respectively             1,097,875       1,074,106
     Retained earnings                        274,006         295,962
     Accumulated other comprehensive loss     (24,831)        (25,363)
     Treasury stock, 5,504,781 shares and
      5,390,799 shares, respectively         (104,566)       (101,498)
                                          ------------ ---------------
         Total shareholders' equity         1,242,484       1,243,207
                                          ------------ ---------------
                                           $3,610,526      $2,529,134
                                          ============ ===============
                        REVENUES BY GEOGRAPHY
                            (In millions)
Three Months Ended May 31,                2007     %      2006     %
                                        --------- ---- ---------- ----
United States                           $ 1,266.5  79    $1,062.0  87
Asia/Pacific Rim                             62.0   4        45.5   4
Middle East                                 214.0  14        95.7   8
Canada                                        4.6   -         3.8   -
Europe                                       47.1   3        11.2   1
South America and Mexico                      5.1   -         6.4   -
Other                                         2.1   -         2.2   -
                                        --------- ---- ---------- ----
    Total revenues                      $ 1,601.4 100%   $1,226.8 100%
                                        ========= ==== ========== ====
Nine Months Ended May 31,                  2007    %       2006    %
                                        --------- ---- ---------- ----
United States                           $ 3,252.8  80    $3,237.1  90
Asia/Pacific Rim                            161.9   4       123.1   4
Middle East                                 514.0  13       167.4   5
Canada                                       11.3   -        10.5   -
Europe                                      116.7   3        41.9   1
South America and Mexico                     14.8   -        13.0   -
Other                                         8.8   -         8.1   -
                                        --------- ---- ---------- ----
    Total revenues                      $ 4,080.3 100%   $3,601.1 100%
                                        ========= ==== ========== ====
                          BACKLOG BY SEGMENT
                            (In millions)
                                         May 31,       August 31,
                                          2007     %      2006     %
                                        --------- ---- ---------- ----
Fossil and Nuclear                      $ 5,549.1  42    $3,238.4  35
E&I;                                       2,740.9  21     2,765.1  30
E&C;                                       2,457.1  18     1,412.3  16
Maintenance                               1,880.1  14     1,250.9  14
F&M;                                         701.4   5       408.9   5
                                        --------- ---- ---------- ----
   Total backlog                        $13,328.6 100%   $9,075.6 100%
                                        ========= ==== ========== ====
                 REVENUES AND GROSS PROFIT BY SEGMENT
                  (In thousands, except percentages)
                        Three Months Ended       Nine Months Ended
                             May 31,                  May 31,
                     ------------------------ ------------------------
                        2007         2006        2007         2006
                     ----------- ------------ ----------- ------------
Revenues
  Fossil and Nuclear $  441,424  $  180,213   $1,046,184  $  589,816
  E&I;                   381,146     513,419    1,079,831   1,700,478
  E&C;                   293,267     163,615      753,589     387,638
  Maintenance           363,197     296,448      867,596     702,186
  F&M;                   122,402      73,089      333,147     220,959
                     ----------- ------------ ----------- ------------
    Total revenues   $1,601,436  $1,226,784   $4,080,347  $3,601,077
                     =========== ============ =========== ============
Gross profit
  Fossil and Nuclear $   33,838  $  (54,569)  $   36,581  $  (20,308)
  E&I;                    29,038      45,577       66,647     168,807
  E&C;                    25,160      14,682       55,713      15,677
  Maintenance            16,917      10,625       13,417      30,780
  F&M;                    30,543      17,600       80,468      44,956
                     ----------- ------------ ----------- ------------
   Total gross
    profit           $  135,496  $   33,915   $  252,826  $  239,912
                     =========== ============ =========== ============
Gross profit
 percentage
  Fossil and Nuclear        7.7%      (30.3%)        3.5%       (3.4%)
  E&I;                       7.6%        8.9%         6.2%        9.9%
  E&C;                       8.6%        9.0%         7.4%        4.0%
  Maintenance               4.7%        3.6%         1.5%        4.4%
  F&M;                      25.0%       24.1%        24.2%       20.3%
   Total gross
    profit
    percentage              8.5%        2.8%         6.2%        6.7%
The Company believes it is important that we discuss our operating
 results excluding the Investment in Westinghouse segment. We acquired
 a 20% interest in Westinghouse in October 2006. We have classified
 the Investment in Westinghouse as a separate operating segment. The
 majority of the activity related to this segment will be recorded
 below the operating income line. During the quarter, we have recorded
 interest expense as well as other significant non-cash charges
 related to the investment.  We believe that presenting our financial
 results excluding the Investment in Westinghouse segment is important
 to investors and management to order to demonstrate the profitability
 of our other segments as well as to point out certain non-cash
 charges related to this investment.
The Shaw Group Inc.
Reconciliation of Shaw Consolidated Results to Shaw Excluding
 Investment in
Westinghouse Segment for the three months ended May 31, 2007
(in millions, except per share                Q3 FY 2007
 data)
                                 -------------------------------------
                                      Quarter ended May 31, 2007
                                 -------------------------------------
                                                            Actuals
                                             Westinghouse  Excluding
                                 As Reported   Segment    Westinghouse
                                 ----------- ------------ ------------
Revenues                           $1,601.4        $ 0.0     $1,601.4
Cost of revenues                    1,465.9          0.0      1,465.9
                                 ----------- ------------ ------------
Gross profit                          135.5          0.0        135.5
General and administrative
 expenses                              68.5          0.1         68.4
                                 ----------- ------------ ------------
Operating income (loss)                67.0         (0.1)        67.1
Interest expense                       (3.1)         0.0         (3.1)
Interest expense on JPY-
 denominated bonds including
 accretion and amortization            (8.5)        (8.5)         0.0
Interest income                         3.0          0.0          3.0
Foreign currency translation
 gains (losses) on JPY-
 denominated bonds, net                15.4         15.4          0.0
Other foreign currency
 transaction gains (losses), net       (0.3)         0.0         (0.3)
Other income (expense), net             0.4          0.0          0.4
                                 ----------- ------------ ------------
                                        6.9          6.9          0.0
Income (loss) before income
 taxes, minority interest,
 earnings (losses) from
 unconsolidated entities and
 loss from and impairment of
 discontinued operations               73.9          6.8         67.1
Provision (benefit) for income
 taxes                                 15.7          2.7         13.0
                                 ----------- ------------ ------------
Income (loss) before minority
 interest, earnings (losses)
 from unconsolidated entities
 and loss from and impairment of
 discontinued operations               58.2          4.1         54.1
Minority interest                      (4.3)         0.0         (4.3)
Income from 20% Investment in
 Westinghouse, net of income
 taxes                                  1.6          1.6          0.0
Earnings (losses) from
 unconsolidated entities, net of
 income taxes                          (0.8)         0.0         (0.8)
                                 ----------- ------------ ------------
Income (loss) from continuing
 operations                            54.7          5.7         49.0
Loss from and impairment of
 discontinued operations, net of
 income taxes                          (0.1)         0.0         (0.1)
                                 ----------- ------------ ------------
Net income (loss)                  $   54.6        $ 5.7     $   48.9
                                 =========== ============ ============
Net income (loss) per common
 share:
     Basic income (loss) per
      common share                 $   0.68        $0.07     $   0.61
                                 =========== ============ ============
     Diluted income (loss) per
      common share                 $   0.67        $0.07     $   0.60
                                 =========== ============ ============
Weighted average shares
 outstanding:
Basic:                                 80.1         80.1         80.1
Diluted:                               81.9         81.9         81.9
The Shaw Group Inc. defines EBITDA as earnings before interest
 expense, income taxes, depreciation and amortization.  EBITDA is an
 important financial measure used by The Shaw Group Inc. to assess
 performance.  Although it is calculated using components derived from
 our GAAP financial statements, EBITDA itself is not a GAAP measure.
 The following table reflects the Company's calculation of EBITDA and
 EBITDA percentage.  Calculations of EBITDA should not be viewed as a
 substitute for calculations under GAAP, including cash flow from
 operations, operating income and net income.  In addition, EBITDA
 calculations by one company may not be comparable to EBITDA
 calculations made by another company.
                                     Q3 FY 2007               Q3 FY
                                                                2006
                        ------------------------------------ ---------
                                                 Actuals
                           As     Westinghouse   Excluding
(in millions)            Reported    Segment    Westinghouse  Actuals
                        --------- ------------ ------------- ---------
Net Income (Loss)       $   54.6         $ 5.7     $   48.9  $  (16.7)
----------------------- --------- ------------ ------------- ---------
Interest Expense            11.6           8.5          3.1       4.9
Depreciation and
 Amortization               10.1             -         10.1       8.3
Provision for Income
 Taxes                      15.7           2.7         13.0     (12.2)
Income Taxes on
 Unconsolidated Subs         0.3           1.1         (0.8)      0.2
Income Taxes on
 Discontinued Ops           (0.1)            -         (0.1)     (0.2)
----------------------- ----------------------------------------------
EBITDA                  $   92.2         $18.0     $   74.2  $  (15.7)
======================= ==============================================
Revenue                  1,601.4           N/A      1,601.4   1,227.0
----------------------- --------- ------------ ------------- ---------
EBITDA %                     5.8%          N/A          4.6%     -1.3%
======================= ========= ============ ============= =========

CONTACT: The Shaw Group Inc.
Investor Contact:
Chris Sammons, 225-932-2546
or
Media Contact:
Sean Clancy, 225-987-7129

SOURCE: The Shaw Group Inc.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding SHAW GROUP INC's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.


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