Steelmaker Nucor Corporation ( NUE - Analyst Report ) reported adjusted (excluding special items) earnings of 42 cents per share in the first quarter of 2012, above the Zacks Consensus Estimate of 40 cents and its own expectation of 30 to 35 cents.

However, profit (as reported) dipped roughly 9% year over year to $145.1 million (or 46 cents a share) from $159.8 million or 50 cents per share reported a year ago.

Nucor's consolidated net sales increased 5% year over year to $5.07 billion in the quarter. The jump in the top line was driven by a 6% increase in average sales price per ton. However, the increase in revenues was not enough to meet the Zacks Consensus Estimate of $5.085 billion as a 1% decline in total tons shipped to outside customers weighed on the top line.

The average scrap and scrap substitute cost per ton used in the quarter was $445, up 5% year over year.

Overall operating rates at Nucor’s steel mills were approximately 79% in the quarter, which is comparatively flat as against the operating rate of 80% in the year ago period. Total energy costs dropped approximately $2 per ton from the prior-year quarter, primarily due to lower unit costs for natural gas.

Nucor’s liquidity position remained strong at the end of the quarter. The company had cash and cash equivalents and short-term investments of $2.38 billion as of March 31, 2012. It also has an untapped $1.5 billion revolving credit facility that will mature in December 2016.

In February, Nucor's board of directors had declared a cash dividend of 36.5 cents per share, which was the company’s 156^th quarterly cash dividend on the trot. The dividend is payable on May 11, 2012, to stockholders of record as of March 30, 2012.

The company is on schedule for completion of construction and beginning of start-up of its 2,500,000-ton direct reduced iron (DRI) facility in Louisiana in mid-2013. In addition, the David J. Joseph Company, which Nucor had acquired in 2008, acquired three metal recycling companies through its wholly owned subsidiaries. This move is expected to bolster the company’s regional recycling platforms since the acquisitions will bring an estimated additional annual capacity of 275,000 tons.

Nucor expects that its earnings will improve slightly in the second quarter this year. The company is witnessing improved demand in end markets such as heavy equipment, automotive, general manufacturing and energy. However, a sluggish construction market is still a cause for concern.

Nucor Corp. faces stiff competition from Commercial Metals Co. ( CMC - Snapshot Report ) and United States Steel Corp. ( X - Analyst Report ) . We currently have a long-term Neutral recommendation on the company. The stock holds a short-term Zacks #3 Rank (Hold).