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(PHM) - Get PulteGroup Inc. Report

slashed earnings guidance Friday, saying the pace of orders for its new homes fell sharply over the last two months.

Pulte expects to earn 85 cents to 95 cents a share in the second quarter and $4.70 to $5 a share in the full year. Analysts had been forecasting $1.09 a share in the quarter and $5.59 a share in the year, according to Thomson First Call.

Orders for new homes in April and May were 29% below the year-ago level, Pulte said, totaling 6,447 units.

"Buyer demand through April and May has been below expectations and below prior year levels," the company said. "Current demand varies by market, but overall it continues to transition after an extended period of stronger sales. Demand has been impacted by a number of factors including an increase in available inventory of new and existing homes, higher cancellation rates and higher interest rates.

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"Given constrained land supplies and favorable population trends, we remain positive on the long-term demand conditions for the industry, but believe it is appropriate to adjust shorter-term expectations given the current sales environment," Pulte said.

Earlier this week, homebuilder


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was able to beat second-quarter profit forecasts with earnings of $101 million, or $1.55 a share. Those forecasts had come down, however, after an early May warning.

Pulte closed at $33.03 Thursday night, 6.6 times the high end of the new 2006 earnings estimate.