THE SHAW GROUP

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The Shaw Group Inc. Announces Record Results for Fiscal Year 2001; Backlog Reaches $4.5 Billion

BATON ROUGE, La.--(BUSINESS WIRE)--Oct. 9, 2001--The Shaw Group Inc. (NYSE:SGR) ("Shaw" or "the Company") today announced an 89% increase in earnings to $19.3 million, or $0.45 per diluted share, for the three months ended August 31, 2001. This compares to earnings of $10.2 million, or $0.30 per diluted share, before an extraordinary item, for the three months ended August 31, 2000. Fourth quarter fiscal 2001 sales increased 46%, reaching $385.7 million, compared to $263.8 million for the fourth quarter of fiscal 2000.

For the year ended August 31, 2001, the Company reported a 101% increase in earnings to $61.2 million, or $1.46 per diluted share, before an extraordinary item. This compares to earnings of $30.4 million, or $0.99 per diluted share, before an extraordinary item and cumulative accounting change, for the year ended August 31, 2000. Sales for the year ended August 31, 2001 increased 102% to $1.5 billion, compared to $763 million in sales for the year ended August 31, 2000.

Shaw's backlog totaled $4.5 billion at August 31, 2001 with approximately 42%, or $1.9 billion, to be worked off during the next 12 months. Driven primarily by strength in the domestic power market, this represents a 137% increase over the $1.9 billion backlog reported at August 31, 2000, and a 25% increase over Shaw's backlog at May 31, 2001 of $3.6 billion.

"This has been an extraordinary year of achievement and growth for our Company," stated J. M. Bernhard, Jr., Shaw's Chairman, President and Chief Executive Officer. "Our employees are to be commended for their success in placing us in a position to win. Beyond our record financial results, we are very pleased with the relationships we have formed with our customers and we are confident that they will provide a means for increasing shareholder value as they continue to develop and unfold over the next year."

The Shaw Group Inc. is the world's only vertically-integrated provider of complete piping systems and comprehensive engineering, procurement and construction services to the power generation industry. Shaw is the largest supplier of fabricated piping systems in the United States and a leading supplier worldwide, having installed piping systems in power plants with an aggregate generation capacity in excess of 200,000 megawatts. While the majority of Shaw's backlog is attributable to the power generation industry, the Company also does work in the process industries, including petrochemical, chemical and refining, and the environmental and infrastructure sector. The Company currently has offices and operations in North America, South America, Europe, the Middle East and Asia-Pacific; and has more than 13,000 employees. For additional information on The Shaw Group, please visit the Company'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 Statement". 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.
                  Consolidated Statements of Income
               (In thousands, except per share amounts)
                             Three Months Ended    Twelve Months Ended
                                 August 31,             August 31,
                           --------------------- ---------------------
                               2001      2000       2001       2000
                           ---------- ---------- ---------- ----------
Income:
   Sales                   $  385,738 $  263,838 $1,538,932 $  762,655
   Cost of sales              322,238    218,783  1,292,316    635,579
                           ---------- ---------- ---------- ----------
     Gross profit              63,500     45,055    246,616    127,076
General and administrative
 expenses                      33,018     25,203    139,660     74,297
                           ---------- ---------- ---------- ----------
   Operating income            30,482     19,852    106,956     52,779
Interest expense               (5,673)    (3,070)   (15,680)    (8,003)
Other income, net               6,074        188      8,618        772
                           ---------- ---------- ---------- ----------
                                  401     (2,882)    (7,062)    (7,231)
                           ---------- ---------- ---------- ----------
Income before income taxes,
 earnings  (losses) from
 unconsolidated entities,
 extraordinary item and
 cumulative effect of
 change in accounting
 principle                     30,883     16,970     99,894     45,548
Provision for income taxes     11,595      7,030     38,366     16,359
                           ---------- ---------- ---------- ----------
Income before earnings
 (losses) from
 unconsolidated entities,
 extraordinary item and
 cumulative effect of
 change in accounting
 principle                     19,288      9,940     61,528     29,189
Earnings (losses) from
 unconsolidated entities
 (net of taxes)                    41        215       (316)     1,194
                           ---------- ---------- ---------- ----------
Income before extraordinary
 item and cumulative effect
 of change in accounting
 principle                     19,329     10,155     61,212     30,383
Extraordinary item for
 early extinguishment of
 debt, net of taxes                --       (553)      (215)      (553)
Cumulative effect on prior
 years of change in
 accounting for start-up
 costs, net of taxes               --         --         --       (320)
                           ---------- ---------- ---------- ----------
Net Income                 $   19,329 $    9,602 $   60,997 $   29,510
                           ========== ========== ========== ==========
Basic income per common
 share:
   Number of shares            40,990     32,357     40,127     29,636
   Income before
    extraordinary item and
    cumulative effect of
    change in accounting
    principle              $     0.47 $     0.32 $     1.53 $     1.03
   Extraordinary item              --      (0.02)     (0.01)     (0.02)
   Cumulative effect of
    change in accounting
    principle                      --         --         --      (0.01)
                           ---------- ---------- ---------- ----------
   Net income per common
    share                  $     0.47 $     0.30 $     1.52 $     1.00
                           ========== ========== ========== ==========
Diluted income per common
 share (includes addback of
 $2,523 of interest on
 convertible debt, net of
 taxes, for three months
 ending August 31, 2001):
   Number of shares            48,872     33,982     41,828     30,771
   Income before
    extraordinary item and
    cumulative effect of
    change in accounting
    principle              $     0.45 $     0.30 $     1.46 $     0.99
   Extraordinary item              --      (0.02)        --      (0.02)
   Cumulative effect of
    change in accounting
    principle                      --         --         --      (0.01)
                           ---------- ---------- ---------- ----------
   Net income per common
    share                  $     0.45 $     0.28 $     1.46 $     0.96
                           ========== ========== ========== ==========
              SALES AND BACKLOG BY INDUSTRY AND GEOGRAPHY
                           Sales by Industry
                 (Three Months Ended August 31, 2001)
 Power Generation                   $    242.0 million          63%
 Process Industries                 $     69.0 million          18%
 Environmental & Infrastructure     $     38.6 million          10%
 Other Industries                   $     36.1 million           9%
                                    ------------------         ----
 Total                              $    385.7 million         100%
                          Sales by Geography
                 (Three Months Ended August 31, 2001)
 United States                      $    316.3 million          82%
 Asia/Pacific Rim                   $     28.9 million           7%
 Europe                             $     27.5 million           7%
 South America                      $      6.4 million           2%
 Other                              $      5.8 million           2%
 Middle East                        $      0.8 million           0%
                                    ------------------         ----
 Total                              $    385.7 million         100%
                           Sales by Industry
                     (Year Ended August 31, 2001)
 Power Generation                   $   915.7 million           59%
 Process Industries                 $   305.5 million           20%
 Environmental & Infrastructure     $   186.2 million           12%
 Other Industries                   $   131.5 million            9%
                                    -----------------          ----
 Total                              $ 1,538.9 million          100%
                          Sales by Geography
                     (Year Ended August 31, 2001)
 United States                      $ 1,285.4 million           84%
 Asia/Pacific Rim                   $   117.1 million            7%
 Europe                             $    86.4 million            6%
 Other                              $    23.9 million            2%
 South America                      $    23.1 million            1%
 Middle East                        $     3.0 million            0%
                                    -----------------          ----
 Total                              $ 1,538.9 million          100%
                          Backlog by Industry
                         (At August 31, 2001)
 Power Generation                   $ 3,540.1 million           79%
 Process Industries                 $   666.4 million           15%
 Environmental & Infrastructure     $   231.9 million            5%
 Other Industries                   $    58.8 million            1%
                                    -----------------          ----
 Total                              $ 4,497.2 million          100%
                         Backlog by Geography
                         (At August 31, 2001)
 Domestic                           $ 3,743.0 million           83%
 International                      $   754.2 million           17%
                                    -----------------         -----
 Total                              $ 4,497.2 million          100%

--30--LS/na*

CONTACT: The Shaw Group Inc., Baton Rouge
Christine N. Mollere, 225/932-2500




"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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