THE SHAW GROUP

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The Shaw Group Announces Financial Results for Fourth Quarter and Fiscal Year 2005

BATON ROUGE, La.--(BUSINESS WIRE)--Oct. 21, 2005--The Shaw Group Inc. (NYSE:SGR) today announced financial results for its fourth quarter and fiscal year ended August 31, 2005. Net income for the fourth quarter of fiscal 2005 was $17.9 million, or $0.23 per diluted share. This compares to net income of $10.9 million, or $0.17 per diluted share for the fourth quarter of fiscal 2004. Income from continuing operations for the fourth quarter of fiscal 2005 was $17.9 million, compared to $12.2 million for the fourth quarter of fiscal 2004. Revenues for the fourth quarter of fiscal 2005 were $818.7 million compared to $806.2 million in the previous year's fourth quarter.

For the fiscal year ended August 31, 2005, the Company reported net income of $16.4 million, or $0.23 per diluted share, including charges of $47.8 million ($31.1 million after taxes), or $0.44 per diluted share for the early retirement of debt and $6.9 million after taxes, or $0.10 per diluted share, for the valuation of a deferred tax asset. Not including the charges, net income would have been $54.3 million, or $0.77 per diluted share, for fiscal 2005. For the year ended August 31, 2004, Shaw reported a net loss of $29.0 million, or $0.50 per diluted share. Revenues for the fiscal year ended August 31, 2005 were $3.3 billion, compared to $3.0 billion for the fiscal year ended August 31, 2004.

Shaw's backlog totaled $6.7 billion at August 31, 2005, Shaw's highest ever backlog and a 16% increase over the backlog at August 31, 2004. Approximately $2.4 billion, or 36% of the backlog, is expected to be converted during fiscal 2006. Nearly $3.0 billion, or 45% of the backlog, is comprised of projects for energy industry customers, primarily in fossil fuel and nuclear power plants and approximately $2.2 billion, or 33%, is in the environmental and infrastructure sector, primarily in contracts with Federal agencies. Approximately $1.4 billion of the backlog is related to the chemicals industry.

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 $0.23 per diluted share, as well as our positive net cash flows from operations of $7.0 million. This marks our sixth consecutive quarter with positive results in both net income and net cash flows, excluding the third quarter charges for the debt retirement and a deferred tax asset valuation allowance. Not including the third quarter charges, our net income for fiscal 2005 was a strong $0.77 per diluted share."

Mr. Bernhard added, "Shaw reported record backlog as of August 31, 2005, as we added three very significant projects this past quarter - the PPL scrubbers, the SHARQ ethylene plant in Saudi Arabia, and the Cleco CFB power plant. We are particularly pleased with these major awards because they demonstrate our success in establishing a global leadership position in the markets we serve. As we move into fiscal 2006, Shaw will continue to be a world leader in providing solutions to industrial and governmental clients. We are well positioned with premier technology and professional capabilities to continue to pursue additional significant opportunities afforded us by expanding markets, especially within the fossil fuel and nuclear power generation, petrochemical processing, emergency response and infrastructure markets."

The Shaw Group Inc. is a leading global provider of technology, engineering, procurement, construction, maintenance, fabrication, manufacturing, consulting, remediation, and facilities management services for the energy, chemicals, environmental, infrastructure and emergency response markets. With over $3 billion in annual revenues, Shaw is headquartered in Baton Rouge, Louisiana, and employs approximately 19,000 people at its offices and operations in North America, South America, Europe, the Middle East and the Asia-Pacific region. The Company was recently named for the second consecutive year to Fortune magazine's annual list of "America's Most Admired Companies." For further information, please visit Shaw'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
                        (Dollars in millions)
                         Revenue by Industry
                         --------------------
                (Fourth Quarter Ended August 31, 2005)
                   Environmental & Infrastructure      $  283.2   35 %
                   Energy                                 315.7   39
                   Chemicals                              210.5   25
                   Other Industries                         9.3    1
                                                       --------  -----
                   Total                               $  818.7  100 %
                                                       --------  -----
                                                       --------  -----
                         Revenue by Geography
                         --------------------
                (Fourth Quarter Ended August 31, 2005)
                   United States                       $  716.6   88 %
                   Asia/Pacific Rim                        50.9    6
                   Middle East                             22.9    3
                   Europe                                  18.3    2
                   Canada                                   4.7    1
                   Latin America                            2.8   --
                   Other                                    2.5   --
                                                       --------  -----
                    Total                              $  818.7  100 %
                                                       --------  -----
                                                       --------  -----
                         Revenue by Industry
                         --------------------
                    (Year Ended August 31, 2005)
                   Environmental & Infrastructure      $1,120.1   34 %
                   Energy                               1,393.1   43
                   Chemicals                              693.9   21
                   Other Industries                        58.8    2
                                                       --------  -----
                   Total                               $3,265.9  100 %
                                                       --------  -----
                                                       --------  -----
                         Revenue by Geography
                         --------------------
                     (Year Ended August 31, 2005)
                   United States                       $2,845.9   87 %
                   Asia/Pacific Rim                       227.5    7
                   Middle East                             87.4    3
                   Europe                                  59.1    2
                   Canada                                  13.7   --
                   Latin America                           20.3    1
                   Other                                   12.0   --
                                                       --------  -----
                   Total                               $3,265.9  100 %
                                                       --------  -----
                                                       --------  -----
                         Backlog by Industry
                         --------------------
                       (As of August 31, 2005)
                   Environmental & Infrastructure      $2,244.6   33 %
                   Energy
                        Nuclear Energy                    958.9   15
                        Fossil Fuel EPC                 1,953.1   29
                        Other Energy                       87.2    1
                    Chemicals                           1,424.4   22
                    Other Industries                       34.2   --
                                                       --------  -----
                    Total                              $6,702.4  100 %
                                                       --------  -----
                                                       --------  -----
                         Backlog by Geography
                         --------------------
                        (As of August 31, 2005)
                   Domestic                            $5,206.5   78
                   International                        1,495.9   22
                                                       --------  -----
                   Total                               $6,702.4  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,
                           ------------------- -----------------------
                             2005      2004       2005        2004
                           --------- --------- ----------- -----------
Revenues                   $818,742  $806,188  $3,265,916  $3,015,813
Cost of revenues            745,882   729,178   2,973,500   2,795,489
                           --------- --------- ----------- -----------
  Gross profit               72,860    77,010     292,416     220,324
General and administrative
 expenses                    49,689    52,582     190,248     211,914
                           --------- --------- ----------- -----------
Operating income             23,171    24,428     102,168       8,410
Interest expense             (2,542)   (9,116)    (29,225)    (38,190)
Interest income               1,782       539       5,571       1,718
Gain (loss) on retirement
 of debt                        ---       (27)    (47,772)     (1,325)
Foreign currency
 transaction gains
 (losses), net                  505       740         919      (2,702)
Other income (expense),
 net                          5,577       337       6,870       1,523
                           --------- --------- ----------- -----------
                              5,322    (7,527)    (63,637)    (38,976)
Income (loss) before
 income taxes, minority
 interest,
 earnings(losses)  from
 unconsolidated entities
 and income(loss) from
 discontinued operations     28,493    16,901      38,531     (30,566)
Provision (benefit) for
 income taxes                10,508     5,570      20,610      (9,901)
                           --------- --------- ----------- -----------
Income (loss) before
 minority interest,
 earnings  from
 unconsolidated entities
 and income (loss) from
 discontinued operations     17,985    11,331      17,921     (20,655)
Minority interest, net of
 taxes                       (1,188)   (1,088)     (3,915)     (5,455)
Earnings(losses) from
 unconsolidated entities,
 net of taxes                 1,066     1,969       3,809       2,578
                           --------- --------- ----------- -----------
Income (loss) from
 continuing operations       17,863    12,212      17,815     (23,542)
Income (loss) from
 discontinued operations,
 net of taxes                  (356)   (1,291)     (1,795)     (2,438)
Gain (impairment) of
 discontinued operations,
 net of taxes                   356       ---         356      (2,995)
                           --------- --------- ----------- -----------
Net income (loss)           $17,863   $10,921     $16,376    $(28,975)
                           --------- --------- ----------- -----------
                           --------- --------- ----------- -----------
Basic:
Income (loss) from
 continuing operations        $0.23     $0.19       $0.26      $(0.41)
Income (loss) from
 discontinued operations,
 net of taxes                   ---     (0.02)      (0.02)      (0.09)
                           --------- --------- ----------- -----------
Net income (loss)             $0.23     $0.17       $0.24      $(0.50)
                           --------- --------- ----------- -----------
                           --------- --------- ----------- -----------
Diluted:
Income (loss) from
 continuing operations        $0.23     $0.19       $0.25      $(0.41)
Income (loss) from
 discontinued operations,
 net of taxes                   ---     (0.02)      (0.02)      (0.09)
                           --------- --------- ----------- -----------
Net income (loss)             $0.23     $0.17       $0.23      $(0.50)
                           --------- --------- ----------- -----------
                           --------- --------- ----------- -----------

CONTACT: The Shaw Group Inc., Baton Rouge
Chris D. Sammons, 225-932-2546

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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