UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q


           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 2000

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

       For the transition period from ............... to ...............

                          Commission File Number 1-1228


                          Stone & Webster, Incorporated
             (Exact name of registrant as specified in its charter)

                Delaware                            13-5416910
    (State of other jurisdiction of      (IRS Employer Identification No.)
     incorporation or organization)

              245 Summer Street, Boston, MA               02210
        (Address of Principal Executive Offices)        (Zip Code)

                                 (617) 589-5111
              (Registrant's telephone number, including area code)




Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X. No .

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.
Common Stock:  14,226,005 shares as of May 8, 2000.



<PAGE>

                 Stone & Webster, Incorporated and Subsidiaries


                                    Form 10-Q


                                      Index

                                                                        Page No.
                                                                        --------

PART I.  FINANCIAL INFORMATION

         Item 1.  Financial Statements

                  Consolidated Statements of Operations (Unaudited):
                   Three Months Ended March 31, 2000 and 1999..............3

                  Consolidated Balance Sheets
                   March 31, 2000 (Unaudited) and December 31, 1999........4

                  Condensed Consolidated Statements of Cash Flows
                   (Unaudited):
                   Three Months Ended March 31, 2000 and 1999..............5

                  Notes to Condensed Consolidated Financial Statements
                   (Unaudited)............................................6-9

         Item 2.  Management's Discussion and Analysis of Results of
                   Operations and Financial Condition....................10-13


PART II. OTHER INFORMATION

         Item 5.  Other Information.......................................14

         Item 6.  Exhibits and Reports on Form 8-K........................14


SIGNATURES................................................................15



<PAGE>

PART I.  Financial Information
Item 1.  Financial Statements


                 Stone & Webster, Incorporated and Subsidiaries
                Consolidated Statements of Operations (Unaudited)
                    (In thousands, except per share amounts)
                                 (See Note (B))


                                                           Three Months Ended
                                                                March 31,
                                                           2000          1999
Revenue                                                  $414,337      $254,656
Cost of revenue                                           387,013       307,283
                                                         --------      --------
  Gross profit (loss)                                      27,324       (52,627)
General and administrative expenses                        16,550        16,726
                                                         --------      --------
Operating income (loss)                                    10,774       (69,353)
Other income (expense):
  Interest income                                             674           661
  Interest expense                                         (1,086)       (1,958)
                                                         --------      --------
Total other income (expense), net                            (412)       (1,297)
                                                         --------      --------
Income (loss) from continuing operations before
 provision for taxes                                       10,362       (70,650)
                                                         --------      --------
Income tax provision (benefit)                              4,232       (10,000)
                                                         --------      --------
Income (loss) from continuing operations                    6,130       (60,650)
Income from discontinued operation, net of tax              1,110         1,956
                                                         --------      --------
Net income (loss)                                        $  7,240      $(58,694)
                                                         ========      ========

Per share amounts:
-----------------
Basic and diluted earnings (loss) per share
  Continuing operations                                     $0.43        $(4.65)
  Discontinued operations                                    0.08          0.15
                                                            -----        ------
    Total earnings (loss) per share                         $0.51        $(4.50)
                                                            =====        ======

Dividends declared per share                                $   -        $ 0.15
                                                            =====        ======
Weighted-average number of shares outstanding:
  Basic                                                    14,219        13,053
                                                           ======        ======
  Diluted                                                  14,219        13,053
                                                           ======        ======


               The accompanying notes are an integral part of the
                       consolidated financial statements.

<PAGE>

                 Stone & Webster, Incorporated and Subsidiaries
                     Consolidated Balance Sheets (Unaudited)
                    (Dollars in thousands, per share amounts)
                                 (See Note (B))

                                                     March 31,
                                                       2000         December 31,
                                                    (Unaudited)        1999
                                                    -----------     ------------
Assets

Current assets:
 Cash and cash equivalents                           $  36,911        $106,481
 Accounts receivable, principally trade, net           280,183         288,824
 Costs and revenues recognized in excess of
  billings                                             121,043          98,663
 Deferred income taxes                                  20,540          23,286
 Other                                                     829             404
                                                      --------        --------
Total current assets                                   459,506         517,658

Fixed assets, net                                       84,967          73,837
Domestic prepaid pension cost                          162,867         157,089
Net assets of discontinued operations                  111,681         112,110
Assets held for sale                                     6,744           6,744
Prepaid expenses                                        12,378          11,719
Other assets                                            20,957          36,139
                                                      --------        --------
Total assets                                          $859,100        $915,296
                                                      ========        ========

Liabilities and Shareholders' Equity

Current liabilities:
 Bank loans                                           $ 24,359        $ 22,793
 Current portion of long-term debt                       2,328           2,344
 Accounts payable, principally trade                   136,371         161,218
 Billings in excess of costs and revenues
  recognized                                           252,532         275,461
 Accrued liabilities                                    58,066          76,612
 Accrued taxes                                          17,138          17,371
                                                      --------        --------
Total current liabilities                              490,794         555,799

Long-term debt                                          19,035          19,950
Deferred income taxes                                   23,124          23,286
Other liabilities                                       13,070          11,216
Shareholders' equity:
 Preferred stock, no par value; authorized
   2,000,000 shares; none issued                             -               -
 Common stock, $1 par value; authorized 40,000,000
   shares; 17,731,488 shares issued including shares
   held in treasury                                     17,731          17,731
 Capital in excess of par value of common stock         42,017          42,579
 Retained earnings                                     369,952         362,712
 Accumulated other comprehensive income                 (9,776)        (10,347)
 Less:  Common stock held in treasury, at cost
         (3,495,103 and 3,554,102 shares)               90,560          92,091
        Employee stock ownership and restricted
         stock plans                                    16,287          15,539
                                                      --------        --------
Total shareholders' equity                             313,077         305,045
                                                      --------        --------
Total liabilities and shareholders' equity            $859,100        $915,296
                                                      ========        ========


               The accompanying notes are an integral part of the
                       consolidated financial statements.


<PAGE>

                 Stone & Webster, Incorporated and Subsidiaries
           Condensed Consolidated Statements of Cash Flows (Unaudited)
                                 (In thousands)


                                                             Three Months
                                                            Ended March 31,
                                                           2000         1999
                                                           ----         ----
Cash Flows from Operating Activities:

Net income (loss)                                        $  7,240     $(58,694)
 Adjustments:
  Income from discontinued operation                       (1,110)           -
  Depreciation and amortization                             4,622        6,066
  Amortization of net cost of stock plans                     382          562
  Deferred income taxes                                     2,584      (11,205)
  Domestic prepaid pension cost                            (5,778)      (3,622)
  Changes in operating assets and liabilities             (77,545)      60,773
                                                         --------     --------
Net cash provided (used) by operating activities          (69,605)      (6,120)
                                                         --------     --------
Cash Flows from Investing Activities:

 Purchases of fixed assets                                   (922)      (6,639)
 Proceeds from note receivable                                  -       15,150
                                                         --------     --------
 Net cash provided (used) by investing activities            (922)       8,511
                                                         --------     --------

Cash Flows from Financing Activities:

 Repayments of long-term debt                                (931)        (532)
 Bank Loans                                                 1,566         (375)
 Dividends paid                                                 -       (1,959)
                                                         --------     --------
 Net cash provided (used) by financing activities             635       (2,866)
                                                         --------     --------
 Net cash provided (by discontinued operation                 322            -
                                                         --------     --------
 Net decrease in cash and cash equivalents                (69,570)        (475)
Cash and cash equivalents at beginning of period          106,481       45,492
                                                         --------     --------
Cash and cash equivalents at end of period               $ 36,911     $ 45,017
                                                         ========     ========



               The accompanying notes are an integral part of the
                       consolidated financial statements.

<PAGE>

                 Stone & Webster, Incorporated and Subsidiaries
        Notes to Condensed Consolidated Financial Statements (Unaudited)


(A)  The accompanying  unaudited condensed  consolidated financial statements of
     Stone & Webster,  Incorporated and  Subsidiaries  (the "Company") have been
     prepared in accordance with generally  accepted  accounting  principles for
     interim  financial  information and with the  instructions to Form 10-Q and
     Article 10 of Regulation S-X.  Accordingly,  they do not include all of the
     information and notes required by generally accepted accounting  principles
     for complete  financial  statements.  The  December  31, 1999  consolidated
     balance sheet data was derived from audited  financial  statements but does
     not  include all  disclosures  required by  generally  accepted  accounting
     principles.  In the opinion of management,  all adjustments  (consisting of
     normal recurring adjustments)  considered necessary for a fair presentation
     have been included.  Operating results for the quarter ended March 31, 2000
     are not necessarily  indicative of the results that may be expected for the
     fiscal year ending  December 31, 2000 or for any other future  period.  For
     further  information,  refer to the consolidated  financial  statements and
     notes  included in the Company's  Annual Report on Form 10- K 405/A for the
     fiscal year ended December 31, 1999 filed with the SEC on May 9, 2000.

     The  preparation  of  condensed   consolidated   financial   statements  in
     conformity  with  generally   accepted   accounting   principles   requires
     management  to make  estimates  and  assumptions  that  affect the  amounts
     reported in the consolidated  financial  statements and accompanying notes.
     Actual results could differ from those estimates.

(B)  Company officials were recently  notified of an unanticipated  cost overrun
     on a key project by a major subcontractor  related to estimates to complete
     work during the first half of 2000.  As a result of this  information,  the
     Company subsequently conducted a thorough review of this project and, based
     on this review,  recorded a provision of $27.5  million to complete work on
     the  project,  and its 1999  financial  statements  were  revised  for such
     matter.

     As a result of the liquidity problems created by the unanticipated  project
     overrun,  coupled with previously  reported  operating losses,  the Company
     accelerated its discussions with potential  lenders and strategic  partners
     to provide  interim  and  long-term  financing.  In  addition,  the Company
     initiated substantive discussions regarding possible strategic transactions
     that  may  result  in the  sale  of  all or  part  of its  engineering  and
     construction  business,  and is continuing to pursue the sale of its Nordic
     Refrigerated  Services  business as planned.  The  Company  also  initiated
     discussions  with certain  subcontractors  with regard to extended  payment
     terms.

     The  issuance of a modified  opinion by the  Company's  independent  public
     accountants in connection  with their audit of the  consolidated  financial
     statements  of the  Company  for the year ended  December  31,  1999,  is a
     default  under its  recently  extended  credit  facility.  The  Company has
     received a waiver  related to this default and certain  other  matters from
     its principal bank lenders until May 31, 2000 and is in discussion with the
     agent bank for such bank lenders for further extension of the waiver.

     On May 8, 2000, the Company signed a letter of intent to sell substantially
     all of its assets in exchange for $150.0 million in cash and stock, and the
     assumption of substantially  all of the Company's  liabilities shown on its
     March  31,  2000  balance  sheet,   standby  letters  of  credit,  and  its
     liabilities  under  a new  credit  facility  entered  into  on May 9,  2000
     pursuant to which up to $50.0 million of credit is being made available  to
     the Company.  The $50.0 million  credit  facility is intended to enable the
     Company to address  its  current  liquidity  difficulties  and  continue to
     operate its business until the asset sale is consummated.

     In  addition,  the  Company,  as a condition  to the  proposed  sale of its
     assets,  intends  to seek  bankruptcy  court  approval  of the asset  sale.
     Accordingly,   the  Company  intends  to  file  a  voluntary  petition  for
     reorganization  under Chapter 11 of the U.S.  Bankruptcy Code following the
     execution of a  definitive  sale  agreement,  which is expected to occur by
     early June 2000.  The proposed  asset sale  transaction  is  conditioned on
     completion of due diligence by the purchaser,  negotiation and execution of
     a definitive  agreement,  approval under  Hart-Scott-Rodino  Act, and other
     customary conditions.  The letter of intent contemplates that the purchaser
     may  not  assume  liabilities  associated  with  certain  of the  Company's
     existing  contracts,  which  contracts, will not be identified  until after
     completion of due  diligence.  Completion of the sale will likely result in
     the  recognition  of a  substantial  loss  since the net book  value of the
     Company's  assets is currently more than $300.0 million.  Determination  of
     the amount of the loss is not reasonably  possible at this time until after
     negotiation   of  a  definitive   sale  agreement  and  completion  of  the
     competitive bid process provided for under Chapter 11.

(C)  Fixed  assets,  net are  stated at cost less  accumulated  depreciation  of
     $104.2 million at March 31, 2000 and $102.3 million at December 31, 1999.

(D)  On October 27, 1999, the Company announced its intention to sell the Nordic
     Refrigerated Services business unit (cold storage segment).  The Company is
     seeking a buyer and has retained  outside  consultants  to assist with this
     sale. Accordingly, the results of the Nordic Refrigerated Services business
     unit have been  classified  as a  discontinued  operation and prior periods
     have been  reclassified.  The contemplated sale of substantially all of the
     Company's assets discussed in Note (B) includes the assets  associated with
     the cold storage segment (or the proceeds therefrom if the sale of the cold
     storage  business  precedes  the  sale of the  remainder  of the  Company's
     assets).  The  continuing  operations  of the Company are the  Engineering,
     Construction and Consulting business.

     Revenue and income from discontinued operation are as follows:

                                                     Three Months Ended
                                                          March 31,
       (in thousands)                                2000          1999
                                                     ----          ----
       Revenue                                     $10,693       $11,442
       Operating income                              1,708         1,956
       Income tax expense                              598             -
                                                   -------       -------
       Income from discontinued operation          $ 1,110       $ 1,956

     Net assets from discontinued operation are as follows:

                                                  March 31,    December 31,
                                                    2000          1999
                                                    ----          ----
       (in thousands)
       Cash                                       $  2,186      $  1,864
       Other current assets                          5,402         5,933
       Property plant and equipment, net           109,484       110,108
       Other assets                                  6,289         4,848
       Current liabilities                          (1,386)       (1,201)
       Deferred taxes                              (10,294)       (9,442)
                                                  --------      --------
       Net assets of discontinued operation       $111,681      $112,110
                                                  ========      ========

(E)  Basic earnings per share for the three months ended March 31, 2000 and 1999
     were  computed  based on the  weighted-  average  number of  common  shares
     outstanding  during the period of 14,218,800 and 13,052,578,  respectively.
     For the three months ended March 31, 2000, dilutive potential common shares
     of 1,139,511 relating to stock options were not included in the computation
     of  diluted  earnings  per share  since  all  options  outstanding  have an
     exercise price greater than market value.  For the three months ended March
     31, 1999,  dilutive  potential  common shares of 986,046  relating to stock
     options were not included in the computation of diluted  earnings per share
     since their effect would be antidilutive.

(F)  The Company had a valuation  allowance  of $17.1  million at March 31, 2000
     and $16.0 million at December 31, 1999 for the deferred tax assets  related
     to net operating loss  carryforwards.  The valuation allowance at March 31,
     2000 comprises $2.7 million  relating to U.S. net operating  losses,  $11.8
     million relating to state net operating loss carryforwards and $2.6 million
     relating to the loss carryforwards of international subsidiaries.

(G)  Pension related items, which reduced operating costs, were $5.3 million for
     the  quarter  ended March 31,  2000  compared to $3.3  million for the same
     period in the prior year. These items increased net income by $3.2 million,
     or $0.22 per share for the quarter ended March 31, 2000, compared with $2.0
     million,  or $0.15 per share for the same periods in 1999.  Pension related
     items include a net pension credit for the Company's domestic  subsidiaries
     and a net pension cost for its foreign subsidiaries.  The pension credit is
     the  result of a plan that is  funded  in excess of the  projected  benefit
     obligation, which is primarily due to favorable asset performance.

(H)  Under  the 1995  Stock  Option  Plan,  as of March 31,  2000,  nonqualified
     options for 523,000 shares were  outstanding and options for 434,125 shares
     were  exercisable.  For the three months  ended March 31, 2000,  no options
     were   exercised,   11,250  options  were  canceled  and  no  options  were
     accelerated.

     Under the Stone & Webster,  Incorporated  Long-Term Incentive  Compensation
     Plan (the "1998  Plan") as of March 31,  2000,  options for 546,000  shares
     were outstanding and 195,542 options were exercisable. For the three months
     ended March 31,  2000,  no options  were  exercised,  109,750  options were
     canceled, and no options were accelerated.  Comprehensive income (loss) was
     $7.8 million and $(58.4)  million for the quarters ended March 31, 2000 and
     1999,  respectively.  Other  comprehensive  income  consists of translation
     adjustments  of $0.6 million and $0.3 million for the quarters  ended March
     31, 2000 and 1999, respectively.

(I)  Certain financial  statement items have been reclassified to conform to the
     current presentation.

(J)  Although the Company  continues  to have  possible  liabilities  related to
     environmental  pollution and other legal actions,  management believes,  on
     the basis of its assessment of these matters,  including  consultation with
     counsel,  that  none of these  pending  legal  actions  nor  such  possible
     liabilities  will result in payments of amounts,  if any, that would have a
     material  adverse effect on the Company's  financial  position,  results of
     operations or earnings per share calculations.

     The Trans-Pacific Petrochemical Indotama ("TPPI") project remains suspended
     pending  resolution  of  financing  issues by the  client.  The Company has
     obtained  approval from the owner to resell or use committed  materials and
     procured equipment to reduce costs of project  suspension.  The Company has
     also had substantive  discussions with potential  purchasers of the olefins
     plant  which  constitutes  the  majority  of the  Company's  scope  for the
     project.  Had the TPPI project been  cancelled as of March 31, 2000, and if
     resale of the olefins plant was unlikely to be completed, the Company would
     have  recorded  a pre-tax  charge  of $78.6  representing  project  working
     capital plus current procurement commitments,  net of the estimated salvage
     value of procured equipment and materials.  On a similar basis, the pre-tax
     charge would have been $72.3 million in 1999.  The TPPI project is included
     in the  Company's  backlog  in the  amounts  of $399.6  million  and $426.0
     million, respectively, at March 31, 2000 and 1999.

     The first quarter 2000 results  include  operating  income of $12.9 million
     from a settlement  reached on an  international  project,  which settlement
     reduces  amounts  expected to be paid by the Company to the  customer.  The
     1999 first quarter results  reflected  provisions of $74.2 million to cover
     completion  costs  for two  international  projects,  one of which  was the
     project  for  which  a  settlement  was  reached  in the  current  quarter.
     Management believes that it has valid contractual and equitable grounds for
     change orders providing  additional  compensation  under the other project.
     The Company has or expects to submit claims greater than losses incurred to
     date.

     A joint venture,  in which the Company is a 50 percent owner, has submitted
     claims to recover approximately $115.0 million in connection with scope and
     specification  changes on a major petrochemical project in the Middle East.
     The joint  venture  has been  notified  of claims  of  approximately  $62.0
     million  which have been  submitted  by a  subcontractor  who has filed for
     arbitration.  Substantially  all of the  subcontractor's  claims  have been
     included in the claims  submitted by the joint  venture to its client.  The
     Company  believes that current reserves are adequate to cover these claims,
     and has not recognized any contract  revenue in anticipation of recovery on
     its claims. In 1997, the Company recognized losses of $25.8 million related
     to this contract.

     The Company recognized  approximately  $35.0 million in revenue in 1998 for
     change  orders  that  have  not yet  received  client  approval,  which  in
     management's judgment, is a conservative estimate of the probable amount to
     be realized.

(K)  In June 1998,  the  Financial  Accounting  Standards  Board  (FASB)  issued
     Statement  of  Financial  Accounting  Standards  No. 133,  "Accounting  for
     Derivative  Instruments and Hedging  Activities." This Statement provides a
     comprehensive  and consistent  standard for the recognition and measurement
     of derivatives and hedging activities. It requires that an entity recognize
     all  derivatives  as  either  assets or  liabilities  in the  statement  of
     financial  position and measure those  instruments  at fair value.  In June
     1999,  the FASB agreed to defer the effective date of the Statement for one
     year. The Statement is now effective for fiscal years  beginning after June
     15,  2000.  The  Company  will adopt the new  standard  by January 1, 2001.
     Management  is  evaluating  the  impact  this  Statement  may  have  on the
     Company's financial statements.

     In December  1999, the SEC released  Staff  Accounting  Bulletin (SAB) 101,
     "Revenue Recognition in Financial  Statements." SAB 101 clarifies the SEC's
     views  related  to  revenue  recognition  and  disclosure.   SAB  101A  was
     subsequently  issued in March 2000,  deferring the requirement to adopt the
     revised  guidance  until the period ended June 30, 2000.  The Company is in
     the  process of  assessing  the impact of this SAB and does not  anticipate
     this having a material effect on the consolidated financial statements.

     In March  2000,  the FASB  issued  FASB  Interpretation  No. 44 ("FIN 44"),
     "Accounting for Certain Transactions  involving Stock Compensation." FIN 44
     clarifies  the  application  of  APB  Opinion  No.  25  regarding  (a)  the
     definition of employee for purposes of applying APB Opinion No. 25, (b) the
     criteria  for  determining  whether  a stock  option  plan  qualifies  as a
     noncompensatory   plan,   (c)  the   accounting   consequence   of  various
     modifications to the terms of a previously fixed stock option or award, and
     (d) the  accounting  for an  exchange  of stock  compensation  awards  in a
     business  combination.  FIN 44 is  effective  July  1,  2000,  but  certain
     conclusions  cover  specific  events that occur after  either  December 15,
     1998, or January 12, 2000. The Company believes that the adoption of FIN 44
     will not have a material  effect on the  financial  position  or results of
     operations of the Company.



<PAGE>

                 Stone & Webster, Incorporated and Subsidiaries
                     Management's Discussion and Analysis of
                  Results of Operations and Financial Condition


The following is  management's  discussion  and analysis of certain  significant
factors that have affected the financial  condition and results of operations of
Stone & Webster,  Incorporated and Subsidiaries  (the "Company") for the periods
noted.  This  discussion  and analysis  should be read in  conjunction  with the
Company's 1999 Annual Report on Form 10-K/A.  Unless noted  otherwise,  earnings
per share calculations disclosed are basic and diluted.

Results of Operations

For the quarter  ended March 31, 2000,  the Company  reported net income of $7.2
million or $0.51 per share,  compared  with a net loss of $58.7 million or $4.50
per share for the same  period  last year.  Operating  income was $10.8  million
compared with an operating loss of $69.4 million, respectively, for the quarters
ended March 31, 2000 and 1999. The first quarter 2000 results include  operating
income of $12.9 million from a settlement  reached on an international  project,
which  settlement  reduces  amounts  expected  to be paid by the  Company to the
customer.  The 1999 first quarter results reflected  provisions of $74.2 million
to cover completion costs for two international  projects,  one of which was the
project for which a settlement was reached in the current quarter.

Engineering,  Construction  and  Consulting  revenue  was $414.3  million,  a 63
percent increase from the first quarter 1999 reported revenue of $254.7 million.
The  increase  in revenue  was  primarily  due to higher  revenues  in the Power
division and also due to the effect of the $74.2 million job provision  that was
offset against  revenue in 1999.  New orders were $188.0  million  compared with
$148.8 million for the first quarter of 1999.  Backlog was $2.4 billion compared
with $2.6 billion at December 31, 1999.

                                                       Three Months
                                                      Ended March 31,
                                                      2000      1999
 Basic and diluted earnings per share from:
   Continuing operations                             $0.21     $(4.80)
   Pension related items                              0.22       0.15
                                                     -----     ------
   Ongoing operations                                 0.43      (4.65)
   Discontinued operations                            0.08       0.15
                                                     -----     ------
   Basic and diluted earnings per share              $0.51     $(4.50)
                                                     =====     ======

Pension  related items reduced  operating  costs by $5.3 million for the quarter
ended March 31, 2000.  The pension credit is the result of a plan that is funded
in  excess  of the  projected  benefit  obligation,  which is  primarily  due to
favorable asset performance.

The  Trans-Pacific  Petrochemical  Indotama  ("TPPI") project remains  suspended
pending  resolution of financing issues by the client.  The Company has obtained
approval  from the owner to  resell  or use  committed  materials  and  procured
equipment  to reduce  costs of  project  suspension.  The  Company  has also had
substantive  discussions  with  potential  purchasers of the olefins plant which
constitutes  the majority of the Company's  scope for the project.  Had the TPPI
project been  cancelled as of March 31, 2000, and if resale of the olefins plant
was unlikely to be completed,  the Company would have recorded a pre-tax  charge
of  $78.6  representing   project  working  capital  plus  current   procurement
commitments,  net of the  estimated  salvage  value of  procured  equipment  and
materials. On a similar basis, the pre-tax charge would have been $72.3 in 1999.
The TPPI project is included in the  Company's  backlog in the amounts of $399.6
and $426.0, respectively, at March 31, 2000 and 1999.

A joint  venture,  in which the  Company is a 50 percent  owner,  has  submitted
claims to recover  approximately  $115.0  million in  connection  with scope and
specification  changes on a major petrochemical  project in the Middle East. The
joint venture has been notified of claims of  approximately  $62.0 million which
have  been  submitted  by  a  subcontractor   who  has  filed  for  arbitration.
Substantially all of the subcontractor's claims have been included in the claims
submitted by the joint venture to its client.  The Company believes that current
reserves are adequate to cover these claims, and has not recognized any contract
revenue  in  anticipation  of  recovery  on its  claims.  In 1997,  the  Company
recognized losses of $25.8 million related to this contract.

The Company recognized approximately $35.0 million in revenue in 1998 for change
orders  that  have not yet  received  client  approval,  which  in  management's
judgment, is a conservative estimate of the probable amount to be realized.

Engineering,  Construction  and Consulting  business  orders and backlog for the
three months ended March 31, 2000 and 1999 were (in thousands):

                                                      Three Months
                                                     Ended March 31,
                                                   2000          1999
     Beginning backlog                          $2,601,969    $2,636,166
     Orders                                        187,990       148,833
     Revenue                                      (414,337)     (254,656)
                                                ----------    ----------
     Ending backlog                             $2,375,622    $2,530,343
                                                ==========    ==========

Orders represent the net amount of new orders, cancellations and scope changes.

Discontinued Operation
----------------------

On October 27,  1999 the  Company  announced  its  intention  to sell the Nordic
Refrigerated  Services  business  unit (cold  storage  segment).  The Company is
seeking buyers and has retained outside  consultants to assist with these sales.
Accordingly,  the results of the Nordic Refrigerated Services business unit have
been  classified  as a  discontinued  operation  and  prior  periods  have  been
reclassified.

General and Administrative Expenses, Other Income (Expenses) and Income Taxes

General and  administrative  expenses for the quarter  ended March 31, 2000 were
$16.6  million  compared  with $16.7  million for the same  period in 1999.  Net
interest  expense for the quarter ended March 31, 2000 was $0.4 million compared
to net interest expense of $1.3 million for the same period in 1999.

Financial Condition

Company officials were recently  notified of an unanticipated  cost overrun on a
key project by a major  subcontractor  related to  estimates  to  complete  work
during  the first half of 2000.  As a result of this  information,  the  Company
subsequently  conducted a thorough  review of this  project  and,  based on this
review,  recorded a provision of $27.5  million to complete work on the project,
and its 1999 financial statements were revised for such matter.

As a result of the  liquidity  problems  created  by the  unanticipated  project
overrun,   coupled  with  previously  reported  operating  losses,  the  Company
accelerated its  discussions  with potential  lenders and strategic  partners to
provide  interim and long-term  financing.  In addition,  the Company  initiated
substantive  discussions  regarding  possible  strategic  transactions  that may
result in the sale of all or part of its engineering and construction  business,
and is  continuing  to  pursue  the  sale of its  Nordic  Refrigerated  Services
business as  planned.  The  Company  also  initiated  discussions  with  certain
subcontractors with regard to extended payment terms.

The  issuance  of  a  modified  opinion  by  the  Company's  independent  public
accountants  in  connection  with  their  audit  of the  consolidated  financial
statements  of the Company for the year ended  December 31,  1999,  is a default
under its recently  extended credit facility.  The Company has received a waiver
related to this  default and  certain  other  matters  from its  principal  bank
lenders  until May 31,  2000 and is in  discussion  with the agent bank for such
bank lenders for further extension of the waiver.

On May 8, 2000, the Company signed a letter of intent to sell  substantially all
of its  assets  in  exchange  for  $150.0  million  in cash and  stock,  and the
assumption of substantially all of the Company's  liabilities shown on its March
31, 2000 balance sheet,  standby letters of credit,  and its liabilities under a
new credit  facility  entered  into on May 9, 2000  pursuant  to which up to $50
million of credit is being made  available  to the  Company.  The $50.0  million
credit  facility  is  intended  to enable the  Company to  address  its  current
liquidity difficulties and continue to operate its business until the asset sale
is consummated.

In  addition,  the Company,  as a condition to the proposed  sale of its assets,
intends to seek bankruptcy  court approval of the asset sale.  Accordingly,  the
Company intends to file a voluntary petition for reorganization under Chapter 11
of the U.S.  Bankruptcy  Code  following  the  execution  of a  definitive  sale
agreement,  which is expected to occur by early June 2000.  The  proposed  asset
sale transaction is conditioned on completion of due diligence by the purchaser,
negotiation   and   execution  of  a  definitive   agreement,   approval   under
Hart-Scott-Rodino  Act,  and other  customary  conditions.  The letter of intent
contemplates  that the  purchaser  may not assume  liabilities  associated  with
certain  of the  Company's  existing  contracts,  which  contracts,  will not be
identified until after completion of due diligence.

Completion  of the sale will likely result in the  recognition  of a substantial
loss since the net book value of the  Company's  assets is  currently  more than
$300.0  million.  Determination  of the  amount  of the  loss is not  reasonably
possible at this time until after negotiation of a definitive sale agreement and
completion of the competitive bid process provided for under Chapter 11.

Other Accounting Matters

In June 1998, the FASB issued  Statement of Financial  Accounting  Standards No.
133,  "Accounting  for  Derivative  Instruments  and Hedging  Activities."  This
Statement  provides a comprehensive and consistent  standard for the recognition
and  measurement  of  derivatives  and hedging  activities.  It requires that an
entity  recognize  all  derivatives  as  either  assets  or  liabilities  in the
statement of financial  position and measure those instruments at fair value. In
June 1999,  the FASB agreed to defer the effective date of the Statement for one
year. The Statement is now effective for fiscal years  beginning  after June 15,
2000. The Company will adopt the new standard by January 1, 2001.  Management is
evaluating  the  impact  this  Statement  may  have on the  Company's  financial
statements.

In December 1999, the SEC released Staff Accounting Bulletin (SAB) 101, "Revenue
Recognition in Financial  Statements." SAB 101 clarifies the SEC's views related
to revenue recognition and disclosure. SAB 101A was subsequently issued in March
2000,  deferring the requirement to adopt the revised  guidance until the period
ended June 30, 2000.  The Company is in the process of  assessing  the impact of
this  SAB  and  does  not  anticipate  this  having  a  material  effect  on the
consolidated financial statements.

In  March  2000,  the  FASB  issued  FASB  Interpretation  No.  44  ("FIN  44"),
"Accounting  for Certain  Transactions  involving  Stock  Compensation."  FIN 44
clarifies the  application of APB Opinion No. 25 regarding (a) the definition of
employee  for  purposes of applying  APB  Opinion No. 25, (b) the  criteria  for
determining whether a stock option plan qualifies as a noncompensatory plan, (c)
the accounting consequence of various modifications to the terms of a previously
fixed stock  option or award,  and (d) the  accounting  for an exchange of stock
compensation awards in a business combination. FIN 44 is effective July 1, 2000,
but certain  conclusions  cover specific events that occur after either December
15, 1998, or January 12, 2000. The Company  believes that the adoption of FIN 44
will  not have a  material  effect  on the  financial  position  or  results  of
operations of the Company.


Forward-Looking Information
---------------------------

The Private Securities  Litigation Reform Act of 1995 provides a safe harbor for
forward-looking  statements  made by or on  behalf  of the  Company.  Any of the
statements  or  comments  made in this  From10-Q  that  refer  to the  Company's
estimated  or future  results are  forward  -looking  and reflect the  Company's
current analysis of existing trends and information. The Company cautions that a
variety of  factors,  including  but not limited to the  following,  could cause
business  conditions and results to differ  materially from what is contained in
forward-looking statements: changes in the rate of economic growth in the United
States and other major  international  economies,  changes in  investment by the
energy, power and environmental  industries,  the uncertain timing of awards and
contracts,  changes in regulatory  environments,  changes in project  schedules,
changes  in  trade,   monetary   and  fiscal   policies   world-wide,   currency
fluctuations, outcomes of pending and future litigation, protection and validity
of patents and other  intellectual  property rights,  increasing  competition by
foreign and domestic companies and other risks detailed from time to time in the
Company's  filings  with the  Securities  and Exchange  Commission.  The Company
undertakes   no   obligation   to  publicly   release  any   revisions   to  the
forward-looking  statements or reflect events or circumstances after the date of
this document.



<PAGE>

PART II.  Other Information
Item 5.   Other Information


On or  about  May 8,  May 9 and May  11,  2000,  three  purported  class  action
lawsuits, one encaptioned Adele Brody v. Stone & Webster,  Incorporated,  et al,
00 CV 10874RCL,  a second  encaptioned  Fred  Dubois,  Jr., vs. Stone & Webster,
Incorporated,  et al, 00 CV 10883CL, and one captioned Albert A. Blank vs. Stone
& Webster,  Incorporated,  et al, 00 CV 10926RCL (collectively the "Complaints")
were filed in the United States District Court for the District of Massachusetts
against the Company and certain of its officers and  directors.  The  Complaints
allege,  among other things,  that during the purported class period, from April
27,  1999 to  April  28,  2000,  the  Defendants  issued  materially  false  and
misleading  statements and failed to disclose  purportedly  material information
concerning the Company's financial results and overstated the Company's revenues
and earnings and violated generally accepted accounting  principles in violation
of  Section  10(b)  of the  Securities  Exchange  Act of  1934  and  Rule  10b-5
promulgated  thereunder,  and Section  20(a) of the  Securities  Exchange Act of
1934.  Plaintiffs seek an unspecified  amount of damages,  interest,  attorney's
fees,  expert fees and other costs. The Defendants  intend to vigorously  defend
against the Complaints.



Item 6.  Exhibits and Reports on Form 8-K


                 Stone & Webster, Incorporated and Subsidiaries
                        Exhibits and Reports on Form 8-K.


(a)  Exhibit Index

     (4)  Instruments  defining  the  rights  of  security  holders,   including
          indentures.

          As of March 31, 2000,  registrant and its subsidiaries had outstanding
          long-term debt  (excluding  current  portion)  totaling  approximately
          $19.0 million,  principally in connection with a mortgage  relating to
          real  property for a  subsidiary's  office  building and in connection
          with  capitalized  lease  commitments  for the  acquisition of certain
          office equipment.  None of these agreements are filed herewith because
          the amount of indebtedness  authorized  under each such agreement does
          not exceed 10 percent of the total  assets of the  registrant  and its
          subsidiaries on a consolidated basis; the registrant hereby undertakes
          to furnish copies of such agreements to the Commission upon request.


     (27) Financial Data Schedule.

(b)  Reports on Form 8-K

     Registrant  did not file any  reports on Form 8-K during  the  quarter  for
     which this report is filed.





<PAGE>

                 Stone & Webster, Incorporated and Subsidiaries


                                    FORM 10-Q


                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                       STONE & WEBSTER, INCORPORATED




                                       By: /S/   THOMAS L. LANGFORD
Dated:  May 15, 2000                       -------------------------------------
                                           Thomas L. Langford
                                           Executive Vice President
                                           (Duly authorized officer and
                                            principal financial officer)