Intel Corp., the world's largest semiconductor maker, on Thursday lowered its revenue guidance, citing lower-than-expected demand in Europe, and sparking a steep slide in its stock in after-hours trading. Santa Clara, California-based Intel said it now expects second-quarter revenues of $6.2 billion to $6.5 billion, compared with an April forecast of $6.4 billion to $7.0 billion. Analysts expected the company to post a profit of 15 cents a share, with a range of 14 cents to 17 cents, on revenues of $6.67 billion in the second quarter, according to research firm Thomson First Call. Intel also expects its gross margin to be 49 percent, the proportion of revenue remaining after subtracting product costs, below its earlier forecast of 53 percent, plus or minus a couple of points, due to lower-than-expected revenues and product mix.

Shares of Intel, known for its Pentium microprocessors that are the brains of most personal computers, fell $1.18 to $27 on Nasdaq before Intel issued its update. In trading after the close they fell 10 percent to $24.18. Although analysts and investors had prepared themselves for a narrowing of the revenue range toward the lower end, that Intel took the bottom out of the previous range was a surprise, indicating that demand is even weaker than earlier thought.