(Adds CEO quote from conference call; updates stock)
NEW YORK, April 24 (Reuters) - Nucor Corp. , the largest U.S. steel producer, said on Thursday first-quarter earnings fell slightly because of a weak economy and higher costs for raw materials and energy.
Nucor, which raised its dividend 5 percent, also said second-quarter earnings would be well below analyst expectations.
Chief Executive Dan DiMicco said in a conference call that softer flat-rolled steel prices will be one of the biggest factors working against the company in the second quarter, offset by improving prices for steel bars and beams and possibly lower energy costs.
"While the flat-roll area is definitely a negative, there are other aspects of our business now that are actually beginning to turn around and beginning to have a positive impact on earnings," said DiMicco.
The Charlotte, North Carolina, company reported net income of $17.8 million, or 23 cents a share, compared with $20.3 million, or 26 cents per share, a year earlier.
In February, Nucor had forecast earnings of 20 cents to 25 cents per share, far below the 44-cent average outlook of analysts polled by Thomson First Call. Analysts then lowered their estimates to a mean of 22 cents.
Sales rose to $1.48 billion from $1.08 billion last year.
The company said it expects second-quarter earnings to be similar to first-quarter earnings, which would be far lower than the average analyst estimate of 35 cents per share and last year's earnings of 77 cents per share.
The company said it expects weak economic conditions and depressed levels of non-residential construction will hurt second-quarter results.
The poor environment for steel companies in the United States -- including a surge in health-care and pension costs -- has pushed more than 30 steelmakers into bankruptcy since 1997, leading to a wave of consolidation within the industry.
Most recently, United States Steel Corp. won a bidding war to take over the assets of bankrupt National Steel Corp. , and International Steel Group Inc. is set to acquire Bethlehem Steel Corp. .
International Steel and U.S. Steel have also signed labor deals with the steelworkers union to vastly lower labor costs.
HSBC analyst Peter Bures said the consolidation will create more intense competition for Nucor.
"Nucor has very low labor costs ... but from a cost-cutting perspective, it's going to be difficult for Nucor to cut any further," said Bures.
"They will remain profitable going forward, though not as profitable as they have in the past, because these mills now with the lower labor costs will be able to continue producing even as steel prices go down."
Shares of Nucor, which fell 7.6 percent during the quarter, were down 93 cents, or more than 2 percent, at $40.37 in late New York Stock Exchange trade.