* Q1 loss 60 cents/share
* Sales fall 47 percent to $2.65 billion
* Nucor warns of greater Q2 loss
* Stock drops over 6 percent (Adds analyst comments, stock activity)
By Steve James
NEW YORK, April 23 (Reuters) - Steelmaker Nucor Corp (NUE.N) reported a first-quarter loss on Thursday and warned there would be an even bigger loss in the second quarter as the slumping economy has sapped demand and forced output cuts.
The loss was greater than Wall Street expected and, combined with the negative outlook, sent the company's stock down over 6.85 percent to $41.05 in morning trading on the New York Stock Exchange.
"Nucor was the only steel company to give a credible forecast and their conservative view is consistent with ours," said independent steel industry analyst Michelle Applebaum.
She noted that average steel prices dropped about 22 percent in the first quarter and "it is not logical to see a better (current) quarter," as other steelmakers had suggested.
Nucor said that since last September, business and market conditions have worsened with each succeeding month.
"Entering the second quarter of 2009, both the U.S. economy and steel market conditions have continued to deteriorate and we expect a second-quarter loss greater than the first quarter as a result," the company said in a statement.
Continued low operating rates, lower pricing and the consumption of high-cost pig iron inventories will negatively impact earnings, Nucor said, without giving numbers.
The first-quarter net loss was $189.6 million, or 60 cents per share, compared with earnings of $409.8 million, or $1.41 per share, a year earlier, the Charlotte, North Carolina-based steelmaker said. Revenue fell 47 percent to $2.65 billion, from $4.97 billion as steel prices slumped.
Analysts on average were expecting a loss of 57 cents a share and revenue of $2.929 billion, according to Reuters Estimates.
Nucor, which makes steel from scrap and pig iron, said its mills were working off high-priced inventories of those materials that it had purchased before the market collapse in the fourth quarter.
"We expect that the impact from higher cost scrap will disappear during the second quarter," the steelmaker said. "If these current production rates continue, the overhang from the high-cost pig iron will...continue to impact our results through the third quarter."
It said that in the first quarter there was a 43 percent decrease in total tons shipped to outside customers and a 7 percent decrease in average sales price per ton.
The steel mill utilization rate has fallen to around 45 percent from 92 percent in last year's first quarter. As a result, total energy costs increased about $11 per ton from the first quarter of 2008, Nucor said.
Editing by Dave Zimmerman and Gunna Dickson