THE SHAW GROUP

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The Shaw Group Announces Financial Results for Fourth Quarter and Fiscal Year 2004

BATON ROUGE, La.--(BUSINESS WIRE)--Oct. 14, 2004--The Shaw Group Inc. (NYSE: SGR) today announced financial results for its fourth quarter and fiscal year ended August 31, 2004. Net income for the fourth quarter of fiscal 2004 was $10.0 million, or $0.16 per diluted share, which includes $0.6 million, or $0.01 per share, loss from discontinued operations. This compares to net income of $9.2 million, or $0.24 per diluted share, which includes $0.1 million, less than $0.01 per diluted share, loss from discontinued operations, for the three months ended August 31, 2003. For the fourth quarter of fiscal 2004, revenues were $823.2 million compared to $765.1 million in the prior year's fourth quarter.

For the fiscal year ended August 31, 2004, the Company reported a net loss of $31.0 million, or $0.53 per diluted share, which includes $4.7 million, or $0.08 per diluted share, loss from discontinued operations. This compares to net income of $20.9 million, or $0.54 per diluted share, which included a $0.2 million, or $0.01 per diluted share, loss from discontinued operations, for the year ended August 31, 2003. Revenues for the year ended August 31, 2004 were $3.1 billion, compared to $3.3 billion for the year ended August 31, 2003.

Shaw's backlog totaled $5.8 billion at August 31, 2004, a $1.0 billion increase from the prior year. Approximately 43%, or $2.5 billion, of the backlog is expected to be converted during fiscal 2005. Approximately 50% of the backlog is in the environmental and infrastructure sector, primarily contracts with Federal government agencies, and approximately 38% of the backlog is comprised of projects for nuclear, fossil-fuel and other power generation plants.

J.M. Bernhard, Jr., Chairman and Chief Executive Officer of The Shaw Group Inc., said, "We are very pleased with our fourth quarter net income of $0.16 per share and positive net cash from operations of $13 million. This is our second consecutive quarter of positive results in both categories, reflecting the continued hard work of our entire Shaw team to put several difficult projects behind us and to focus on project execution and improving markets."

Mr. Bernhard added, "We have continued to diversify our services. During 2004, our revenues were less driven by large fossil-fuel power construction projects than in prior years. However, we have seen signs of improvement in the fossil-fuel sector recently as evidenced by the addition of two new combined cycle engineering and construction projects and our FGD scrubber projects. These new fossil-fuel projects compliment our strong nuclear power, process, and expanding environmental and infrastructure sectors. As we look forward into 2005 and beyond, we are well positioned with our premier technology and professional capabilities to pursue the significant opportunities afforded by improving markets, especially in the petrochemical processing and FGD scrubber arenas."

The Shaw Group Inc. is a leading global provider of engineering, procurement, construction, maintenance, fabrication, manufacturing, consulting, remediation, and facilities management services for government and private sector clients in the power, process, environmental, infrastructure and emergency response markets. A Fortune 500 Company, The Shaw Group is headquartered in Baton Rouge, Louisiana, and employs approximately 17,000 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 the Company's website at www.shawgrp.com.

Forward-Looking Statements - 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 website 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 website at www.shawgrp.com.

            REVENUE AND BACKLOG BY INDUSTRY AND GEOGRAPHY
                         Revenue by Industry
                         -------------------
                (Fourth Quarter Ended August 31, 2004)
Environmental & Infrastructure              $   361.8 million     44 %
Power Generation                            $   286.3 million     35 %
Process Industries                          $   153.3 million     18 %
Other Industries                            $    21.8 million      3 %
                                            -----------------    -----
Total                                       $   823.2 million    100 %
                         Revenue by Geography
                         --------------------
                (Fourth Quarter Ended August 31, 2004)
United States                               $   653.7 million     79 %
Asia/Pacific Rim                            $    70.9 million      9 %
Middle East                                 $    52.3 million      6 %
Europe                                      $    21.0 million      3 %
Canada                                      $    19.4 million      2 %
Latin America                               $     1.0 million      0 %
Other                                       $     4.9 million      1 %
                                            -----------------    -----
Total                                       $   823.2 million    100 %
                         Revenue by Industry
                         -------------------
                     (Year Ended August 31, 2004)
Environmental & Infrastructure              $ 1,329.4 million     43 %
Power Generation                            $ 1,115.5 million     36 %
Process Industries                          $   544.2 million     18 %
Other Industries                            $    87.8 million      3 %
                                            -----------------    -----
Total                                       $3,076.9 million     100 %
                         Revenue by Geography
                         --------------------
                     (Year Ended August 31, 2004)
United States                               $ 2,511.6 million     82 %
Asia/Pacific Rim                            $   223.4 million      7 %
Middle East                                 $   151.3 million      5 %
Europe                                      $    96.3 million      3 %
Canada                                      $    74.5 million      2 %
Latin America                               $     7.2 million      0 %
Other                                       $    12.6 million      1 %
                                            -----------------    -----
Total                                       $ 3,076.9 million    100 %
                         Backlog by Industry
                         -------------------
                       (As of August 31, 2004)
Environmental & Infrastructure              $ 2,856.4 million     50 %
Power Generation
  Nuclear Power                             $ 1,033.1 million     18 %
  Fossil Fuel EPC                           $ 1,013.2 million     18 %
  Other Power                               $   130.4 million      2 %
Process Industries                          $   723.2 million     12 %
Other Industries                            $     9.7 million      0 %
                                            -----------------    -----
Total                                       $ 5,766.0 million    100 %
                         Backlog by Geography
                         --------------------
                       (As of August 31, 2004)
Domestic                                    $ 4,906.6 million     85 %
International                               $   859.4 million     15 %
                                            -----------------    -----
Total                                       $ 5,766.0 million    100 %
                          THE SHAW GROUP INC.
                 CONSOLIDATED STATEMENTS OF OPERATIONS
                              (Unaudited)
               (In thousands, except per share amounts)
                          Three Months Ended     Twelve Months Ended
                              August 31,             August 31,
                        ---------------------- -----------------------
                           2004       2003        2004        2003
                        ----------- ---------- ----------- -----------
Revenues                $  823,171  $ 765,132  $3,076,945  $3,292,804
Cost of revenues           747,679    690,947   2,857,162   3,023,048
                        ----------- ---------- ----------- -----------
   Gross profit             75,492     74,185     219,783     269,756
General and
 administrative expenses    53,541     51,388     215,792     197,725
                        ----------- ---------- ----------- -----------
Operating income (loss)     21,951     22,797       3,991      72,031
Interest expense            (9,192)   (10,913)    (38,429)    (32,043)
Interest income                539        884       1,718       5,406
Gain (Loss) on LYONs
 repurchases                   (27)       754      (1,325)      2,723
Foreign currency
 transaction gains
 (losses), net                 740      1,035      (2,702)        135
Other income (expense),
 net                           337       (879)      1,523     (13,074)
                        ----------- ---------- ----------- -----------
                            (7,603)    (9,119)    (39,215)    (36,853)
                        ----------- ---------- ----------- -----------
Income (loss) before
 income taxes, minority
 interest, earnings
 (losses) from
 unconsolidated
 entities and (loss)
 income from
 discontinued operations    14,348     13,678     (35,224)     35,178
Provision (benefit) for
 income taxes                4,610      4,498     (11,624)     11,580
                        ----------- ---------- ----------- -----------
Income (loss) before
 minority interest,
 earnings (losses) from
 unconsolidated
 entities and (loss)
 income from
 discontinued operations     9,738      9,180     (23,600)     23,598
Minority Interest           (1,088)        --      (5,284)         --
                        ----------- ---------- ----------- -----------
Income (loss) before
 earnings (losses) from
 unconsolidated
 entities and (loss)
 income from
 discontinued operations     8,650      9,180     (28,884)     23,598
Earnings (losses) from
 unconsolidated
 entities, net of taxes      1,970       (105)      2,578      (2,979)
                        ----------- ---------- ----------- -----------
Income (loss) from
 continuing operations      10,620      9,075     (26,306)     20,619
(Loss) income from
 discontinued operations
 of certain businesses
 of the Fabrication,
 Manufacturing and
 Distribution Segment,
 net of taxes:
   (Loss) income from
    operations                (600)       127      (1,674)        247
   Impairment on
    discontinued
    operations                  --         --      (2,995)         --
                        ----------- ---------- ----------- -----------
     (Loss) income from
      discontinued
      operations, net
      of taxes                (600)       127      (4,669)        247
Net income (loss)       $   10,020  $   9,202  $  (30,975) $   20,866
                        =========== ========== =========== ===========
                          THE SHAW GROUP INC.
           CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
                              (Unaudited)
               (In thousands, except per share amounts)
                            Three Months Ended    Twelve Months Ended
                                August 31,            August 31,
                           --------------------- ---------------------
                             2004       2003       2004       2003
                           ---------- ---------- ---------- ----------
Net income (loss) per
 common share:
Basic:
Income (loss) from
 continuing operations     $    0.17  $    0.24  $   (0.45) $    0.54
(Loss) income from
 discontinued operations,
 net of taxes                  (0.01)        --      (0.08)      0.01
                           ---------- ---------- ---------- ----------
Net income (loss)          $    0.16  $    0.24  $   (0.53) $    0.55
                           ========== ========== ========== ==========
Diluted:
Income (loss) from
 continuing operations     $    0.17  $    0.24  $   (0.45) $    0.53
(Loss) income from
 discontinued operations,
 net of taxes                  (0.01)        --      (0.08)      0.01
                           ---------- ---------- ---------- ----------
Net income (loss)          $    0.16  $    0.24  $   (0.53) $    0.54
                           ========== ========== ========== ==========
    CONTACT: The Shaw Group Inc., Baton Rouge
             Chris D. Sammons, 225-932-2546
             Website: www.shawgrp.com
    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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