In the middle of the hottest real-estate market in decades, prefab-house seller Clayton Homes ( CMH) -- a company in the process of being acquired by Warren Buffett -- warned fourth-quarter earnings will decline and fall well short of Wall Street estimates.

The company, which manufactures low- to medium- priced prefabricated homes, said earnings per share will likely range from 5 cents to 7 cents, a drop from last year's 25 cents a share for the same period. Analysts had expected a profit of 30 cents per share in the quarter ending in June.

While most homebuilders continue to be upbeat about their business prospects, Clayton cited a downturn in homebuilding and a thorny financing market.

The company blamed a combination of factors for the decline, including "unfavorable interest rate differential between site-built housing rates and manufactured housing rates" and a lack of asset-backed securitization in the current quarter.

Separately, a court rejected a request by Orbis Investment Management, one of Clayton's shareholders, to hold a meeting ahead of a vote on the pending acquisition of the company by Buffet's Berkshire Hathaway ( BRKa).

The decision opens the path for the deal to go through, since Orbis, which was against the takeover, won't have a chance to submit a proposal forcing Clayton to look at other bids.

Clayton Home shares fell 15 cents, or 1.18%, to $12.55.

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