SAN FRANCISCO • Even after sharply reducing its outlook for the fourth quarter, Intel Corp. said Wednesday that it would miss its revenue projection by about $500 million, a sign that PC makers and buyers are being more tightfisted than it seemed only two months ago.

Intel shares closed down 6 percent.

Santa Clara, Calif.-based Intel, the world’s largest chipmaker, now says revenue was $8.2 billion for the last three months of 2008, a 23 percent decline from the year-ago period.

Analysts surveyed by Thomson Reuters were expecting $8.7 billion, which was at the low end of the range Intel provided in November of $8.7 billion to $9.3 billion.

Intel’s profits are also being hit. It expects its gross profit margin to be at the bottom of its previous guidance, which was for 53 to 57 percent of revenue. Gross profit is the amount of money a company earns after manufacturing costs are stripped out. It’s a valuable gauge of how well companies are controlling their costs, and is particularly useful in looking at chipmakers since their manufacturing expenses are huge.

The fact that Intel has had to revise its fourth-quarter guidance twice indicates how deeply the economic meltdown has damaged the semiconductor industry. It also reveals how hard it is for even conservative companies – Intel formally stopped doing midquarter updates in 2006 – to figure out how badly they’re being hurt.

Intel blamed the latest revision on weaker-than-expected demand, piling up in a chain reaction. Businesses are putting off upgrading to new computers until the economy and their finances improve. And consumers, singed by layoffs and falling home prices and stock portfolios, have scaled back their spending as well. In turn that has prompted PC makers to try to save money by burning through their existing inventories of chips instead of buying lots of new ones.

These trends have slammed chipmakers since the downturn intensified in September, and now appears to be worsening.

The news came as little surprise to industry analysts, who have been warning for months that PC suppliers such as Intel might miss even their lowered forecasts.

“It’s not something that indicates any kind of share loss or structural change in the company or the markets,” said Cody Acree, senior semiconductor analyst with Stifel, Nicolaus & Co. “Right now the economy is causing everybody up and down the manufacturing channel to live hand to mouth.”

Bleak outlooks from Time Warner, Intel and Alcoa combined with more evidence of rising unemployment sent stocks sharply lower Wednesday, sending major indexes down more than 2 percent including the Dow Jones industrials, which lost more than 225 points. Photo by (AP Photo/Jae C. Hong)