UPDATE 1-Vulcan quarterly earnings drop; real estate hurts

NEW YORK, May 5 (Reuters) - Construction materials company Vulcan Materials Corp (VMC.N) reported sharply lower first-quarter earnings on Monday, hurt by the prolonged slump in the U.S. real estate market.

The company cautioned that a slow housing market along with higher energy costs would continue to haunt it for the rest of the year. It forecast consolidated earnings from continuing operations of $3.85 to $4.35 per diluted share for 2008.

Analysts polled by Reuters Estimates, on average, expect earnings of $4.53 for the full year, though it was not immediately clear if the figures were comparable.

"Our current earnings outlook for 2008 is subject to a great deal of uncertainty with respect to the economy and financial markets," Chief Executive Officer Don James said in a statement.

"Our outlook reflects a prolonged and severe downturn in residential construction, weaker contract awards in other end markets, the impact of higher costs for construction inputs and the effect of increasing energy-related costs."

For the first quarter, the company posted net earnings of $13.93 million, or 13 cents per share, compared with $88.87 million, or 91 cents per share, in the year-ago period, when it had a 26 cent per share gain with a California real estate sale.

Sales rose to $772 million from $630 million in the first quarter of 2007, the company said.

(Reporting by Paul Thomasch, editing by Richard Chang)