THE SHAW GROUP

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The Shaw Group Announces Solid Results for the Third Quarter of Fiscal 2002
BATON ROUGE, La., Jul 11, 2002 (BUSINESS WIRE) -- The Shaw Group Inc. (NYSE:SGR) ("Shaw" or "the Company") today announced a 49% increase in earnings to $26.7 million, or $0.61 per diluted share, for the three months ended May 31, 2002. This compares to earnings of $17.9 million, or $0.42 per diluted share, for the three months ended May 31, 2001. Third quarter fiscal 2002 sales increased 129% reaching $902.6 million, compared to $394.2 million for the third quarter of fiscal 2001.

Shaw's backlog totaled $6.1 billion at May 31, 2002 with approximately 53%, or $3.2 billion, to be worked off during the next 12 months. This represents a 68% increase over the $3.6 billion backlog reported at May 31, 2001, and a 36% increase over Shaw's backlog at February 28, 2002 of $4.5 billion.

"We are very pleased to report solid financial results on a consistent basis," stated J. M. Bernhard, Jr., Shaw's Chairman, President and Chief Executive Officer. "Our strong balance sheet, project execution skills and ongoing strategy to diversify our portfolio of work have all played a key role in allowing Shaw to maintain its track record of growth. Additionally, the integration of our newly acquired assets in the environmental & infrastructure sector is progressing better than expected. We look for this division to be a major contributor to our success going forward."

For the nine months ended May 31, 2002, the Company reported an increase in earnings to $67.0 million, or $1.56 per diluted share. This compares to earnings of $41.7 million, or $1.00 per diluted share, for the nine months ended May 31, 2001. Sales for the nine months ended May 31, 2002 increased 67% to $1.9 billion, compared to $1.2 billion in sales for the nine months ended May 31, 2001.

The Shaw Group Inc. is the world's only vertically-integrated provider of comprehensive engineering, procurement, pipe fabrication, construction and maintenance services to the power, process and environmental & infrastructure sectors. Shaw is headquartered in Baton Rouge, Louisiana, and currently has offices and operations in North America, South America, Europe, the Middle East and Asia-Pacific. Shaw employs more than 20,000 people annually. Additional information on The Shaw Group is available 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     Nine Months Ended
                                May 31,                May 31,
                         --------------------  ----------------------
                            2002       2001       2002        2001
                         ---------  ---------  ----------  ----------
Income:
   Sales                 $ 902,640  $ 394,154  $1,922,476  $1,153,194
   Cost of sales           816,679    328,624   1,706,063     970,078
                         ---------  ---------  ----------  ----------
     Gross profit           85,961     65,530     216,413     183,116
General and
 administrative expenses    42,400     30,925     106,334      94,557
Goodwill amortization         --        4,200        --        12,097
                         ---------  ---------  ----------  ----------
   Total general and
    administrative
    expenses                42,400     35,125     106,334     106,654
Operating income            43,561     30,405     110,079      76,462
Interest expense            (5,872)    (2,206)    (17,108)    (10,007)
Interest income              3,972      2,591       9,393       3,649
Other income, net             (661)    (1,275)       (217)     (1,435)
                         ---------  ---------  ----------  ----------
                            (2,561)      (890)     (7,932)     (7,793)
                         ---------  ---------  ----------  ----------
Income before income
 taxes and earnings
 (losses) from
 unconsolidated entities    41,000     29,515     102,147      68,669
Provision for income
 taxes                      14,754     11,452      36,773      26,644
                         ---------  ---------  ----------  ----------
Income before earnings
 (losses) from
 unconsolidated entities    26,246     18,063      65,374      42,025
Earnings (losses) from
 unconsolidated entities
 (net of taxes)                484       (173)      1,648        (357)
                         ---------  ---------  ----------  ----------
Net Income               $  26,730  $  17,890  $   67,022  $   41,668
                         =========  =========  ==========  ==========
Basic income per common
 share:
  Net income available to
   common shareholders   $  26,730  $  17,890  $   67,022  $   41,668
                         =========  =========  ==========  ==========
   Number of shares         40,694     40,903      40,638      39,832
                         =========  =========  ==========  ==========
   Net income per common
    share                $    0.66  $    0.44  $     1.65  $     1.05
                         =========  =========  ==========  ==========
Diluted income per common
 share:
   Net income available
    to common
    shareholders         $  26,730  $  17,890  $   67,022  $   41,668
   Interest on
    convertible debt,
    net of taxes             2,661        836       7,944         836
                         ---------  ---------  ----------  ----------
   Net income for diluted
    computation          $  29,391  $  18,726  $   74,966  $   42,504
                         =========  =========  ==========  ==========
   Number of shares         48,257     44,798      48,088      42,394
                         =========  =========  ==========  ==========
   Diluted income per
    common share         $    0.61  $    0.42  $     1.56  $     1.00
                         =========  =========  ==========  ==========
              SALES AND BACKLOG BY INDUSTRY AND GEOGRAPHY
                           Sales by Industry
                  (Third Quarter Ended May 31, 2002)
Power Generation                        $   672.2 million          75%
Environmental & Infrastructure          $   117.3 million          13%
Other Industries                        $    56.8 million           6%
Process Industries                      $    56.3 million           6%
                                        ------------------     -------
Total                                   $   902.6 million         100%
                          Sales by Geography
                  (Third Quarter Ended May 31, 2002)
United States                           $    805.9 million         89%
Asia/Pacific Rim                        $     37.9 million          4%
Europe                                  $     24.8 million          3%
Other North American                    $     21.2 million          2%
South America                           $      8.0 million          1%
Other                                   $      3.1 million          1%
Middle East                             $      1.7 million          0%
                                        -------------------    -------
Total                                   $    902.6 million        100%
                          Backlog by Industry
                           (At May 31, 2002)
Power Generation                        $2,913.2 million           48%
Environmental & Infrastructure          $2,552.4 million           42%
Process Industries                      $  505.9 million            8%
Other Industries                        $  102.9 million            2%
                                        -----------------      -------
Total                                   $6,074.4 million          100%
                         Backlog by Geography
                           (At May 31, 2002)
Domestic                                $5,430.2 million           89%
International                           $  644.2 million           11%
                                        -----------------      ------
Total                                   $6,074.4 million          100%
CONTACT:          The Shaw Group Inc., Baton Rouge
                  Christine N. Mollere, 225/932-2500
URL:              http://www.businesswire.com
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Copyright (C) 2002 Business Wire.  All rights reserved.
"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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