Pulte Takes Cautious Tone

New orders declined 39% to 7,299 homes.

The operating landscape for new-home sales remained challenging during the third quarter, as high inventory levels, affordability issues, elevated cancellation rates and a general lack of buyer confidence continued to weigh on new-home demand, the company said.

In response to these more difficult market conditions, the company said it continues to shorten its land pipeline, reduce production volumes and to balance home price and profitability with sales pace.

Pulte forecast fourth-quarter earnings of 30 cents to 70 cents per share, including a potential $150 million of land-related charges. "While these charges are not a certainty, we think it is appropriate to incorporate the potential impact into our near-term guidance," Dugas said.

Analysts had forecast earnings of $1.09 a share for the fourth quarter.

Shares of Pulte recently were down 64 cents, or 2%, to $31.56.

Earnings Drop at Meritage, M/I Homes

Fellow builders Meritage Homes(MTH Quote) and M/I Homes(MHO Quote) also posted big drops in their third-quarter earnings.

Meritage late Wednesday posted a profit of $59.5 million, or $2.25 a share, down from $70.3 million, or $2.40 a share, a year earlier, as increased incentives weighed on margins. The company also recorded $9 million in charges related to forfeited lot option deposits and inventory writedowns.

Analysts forecast earnings of $2.02 a share.