D.R. Horton ( DHI), joining in the recent pain of a raft of homebuilders, posted a drop in third-quarter new-home orders Thursday and slashed its full-year earnings forecast.

The largest U.S. homebuilder said that its orders for the quarter ended June 30 fell to 14,316 homes from 14,980 a year earlier. The value of the homes sold dropped to $3.8 billion from $4.1 billion.

The company expects to post third-quarter earnings of 93 cents a share, well below analysts' average estimate of $1.30, according to Thomson First Call. The company's forecast includes about 11 cents a share in write-offs related to land option contracts.

For the full fiscal year, D.R. Horton anticipates earnings of at least $3.65 a share, compared with its earlier forecast of $5.25 to $5.35. Analysts target full-year earnings of $4.92 a share.

"The current home sales environment is characterized by an increase in both existing and new homes available for sale, higher than normal cancellation rates and an increase in the use of sales incentives in many of our markets," said Chairman Donald R. Horton in a statement.

The sentiment echoes warnings given across the industry as builders ratchet down their fiscal 2006 estimates. Several major homebuilders, including Toll Brothers ( TOL), KB Home ( KBH) and Pulte ( PHM), have cut their fiscal-year guidance in the past two months.

Shares of D.R. Horton tumbled $2, or 8.8%, to $20.86 in after-hours trading.

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