Updated from March 1Hovnanian ( HOV) reported roughly flat fiscal first-quarter earnings and reiterated its full-year earnings forecast, though the company echoed other homebuilders' recent cautious comments about the softening housing market. For the quarter ended Jan. 31, the Red Bank, N.J.-based builder reported net income of $81.4 million, or $1.25 a share, on $1.28 billion in revenue. A year earlier, the builder earned $81.5 million, or $1.25 a share, on revenue of $1.05 billion. According to Thomson First Call, analysts expected earnings of $1.24 a share and revenue of $1.26 billion. The company delivered 3,845 homes in the quarter, compared with 3,266 a year ago. Homebuilding gross margins rose 50 basis points year over year to 24.3%. Hovnanian's new orders rose 11.9% in the quarter, but the company said the housing market is slowing. "During recent months, market conditions in many of our more highly-regulated markets, including California, Florida, Washington, D.C., and the Northeast, have cooled from their previous white-hot levels, with respect to both sales pace and price increases," said Chief Executive Ara Hovnanian in a statement. "This expectation of a healthy but slower pace of growth is reflected in our projections for fiscal 2006 earnings," Hovnanian said, reiterating the company's earlier forecast for full-year earnings of $8.05 to $8.40 a share. Analysts currently expect earnings of $8.10 a share, compared with the company's fiscal 2005 earnings of $7.16 a share. On a conference call Thursday, Hovnanian expressed confidence about its future, while also admitting that gross margins will remain under pressure. Management said that even if margins drop to 2002 levels -- which means 440 basis points below 2005 -- then the company will continue to post EPS growth favorable to other industries. Hovnanian said a slowing real estate market also means that material and labor costs could trend down.