Blake Ostler wrote a great article on ex nihilo creation. Most traditional Christian (non-Mormon) scholars today understand that the principle of creation ex nihilo was created itself out of nothing (actually due to Greek philosophical influences) around 190 AD.
Mormons believe that matter is eternal. We believe God organized chaotic matter to form the earth and universe.
Joseph Smith cleared up centuries of division, paradoxical creeds, and other philosophic confusion with a few revelations!
It is a long article, but worth your time.
Blake’s bio here: http://blakeostler.com/biography.html