ATLANTA (Reuters) - Building products maker Masco Corp (MAS.N: Quote, Profile, Research) posted a 99 percent drop in first-quarter profit on Tuesday and cut its full-year forecast, saying that U.S. consumers stretched by higher gasoline prices were spending less on home improvements.

Its shares fell more than 5 percent.

The company, which has cut jobs and closed manufacturing plants as the U.S. housing market has slumped, also cited rising costs for metals and freight and increased competition for the lowered forecast.

"This is a consumer recession and consumers are cutting back where they can," Masco Executive Chairman Richard Manoogian said during a conference call.

"Until home prices bottom out, I think there's a lot of reluctance for people to put thousands of dollars of additional investment in their home in high-cost kitchen and bathroom expansion," he added.

The maker of Delta faucets, cabinets and Behr paint said net income came to $2 million, or 1 cent a share, down 99 percent from $143 million, or 37 cents a share, a year earlier.

Excluding charges and other one-time items, profit came to 17 cents a share, compared with the 20 cents expected by analysts, according to Reuters Estimates.

Sales from continuing operations fell 13 percent to $2.4 billion as reduced U.S. home construction and lower spending on renovations led to a 16 percent decline in North American sales. International sales rose 1 percent.

Masco, based in Taylor, Michigan, is a major supplier to retailers Home Depot Inc (HD.N: Quote, Profile, Research) and Lowe's Cos Inc (LOW.N: Quote, Profile, Research). It derives about 40 percent of its sales from new home construction.