NEW YORK (CNN/Money) - Intel Corp. on Thursday narrowed its third-quarter revenue estimate to the low end of the range executives had provided in July, saying microprocessor sales have been weaker than previously expected.

At the same time, executives of the world's largest chipmaker stood by its previous profit forecast, crediting steps the company has taken recently to pare costs.

"We've got very aggressive cost controls implemented, and those are starting to take effect," Paul Otellini, Intel's president and chief operating officer, said on a conference call Thursday evening.

Shortly after Thursday's closing bell, Intel said it expects to log third-quarter revenue between $6.3 billion and $6.7 billion. Previously, the company had been targeting a range between $6.3 billion and $6.9 billion.

At the same time, the company said it still expects the third-quarter gross margin, the percentage of sales remaining after subtracting product costs, to be in a range between 49 percent and 53 percent. Intel typically does not provide specific per-share earnings estimates, choosing instead to set expectations for gross margins.

Wall Street had been bracing for the downbeat business forecast from Intel, the world's top supplier of microprocessor chips for personal computers, as brokerage firms weighed in with cautious comments starting on Tuesday.

Advising clients that continued weakness in the PC industry as well as a shift in demand away from Intel's high-end Pentium 4 processors, which carry higher profit margins, toward its less expensive Celeron line, several analysts trimmed their revenue and earnings forecasts for the company ahead of Thursday's call.

Although it makes other kinds of chips such as flash memory and chips used in communications products, Intel's (INTC: Research, Estimates) fortunes remain closely linked to the PC industry, which has been dogged in recent months as corporations and consumers have become more frugal in the face of a slowing and uncertain economy.

Otellini said so far in the third quarter, microprocessor unit sales are trending toward the lower end of the normal seasonal pattern, while demand for communications products remains soft.

The company's flash memory business is in line with the company's previous expectation that it would remain flat with the second quarter's level, Otellini said.

During the second quarter, Intel's results came in below expectations, which executives attributed in part to a larger-than-expected proportion of sales of Celeron processors versus Pentium 4.

Last June, Andy Bryant, Intel's chief financial officer, characterized that shift as a one-time blip, saying it was likely the result of a shortage of Celeron chips in the first quarter.

But on Thursday, Otellini said the mix of Pentium 4 to Celerons in the third quarter is not expected to change much from that seen in the second quarter. He said the company had built that into its expectations for the quarter prior to Thursday's announcement.

"We gained some share last quarter based upon some incremental volume on the low end, and that's business that we're continuing to take," he said. "I don't see that whole pattern changing."

Otellini also downplayed some of the negative comments other industry participants recently have made about the prospects for the second half as well as recent comments by Intel's own CEO.

Intel and other PC-related companies typically log stronger results in the second half of the year because of the back-to-school and holiday selling seasons. But some early indicators have suggested a weaker-than-expected holiday season.

National Semiconductor, which makes chips for a range of products including PCs, on Wednesday said it is expecting a disappointing holiday season and lowered its revenue target for the current quarter.

Even Craig Barrett, Intel's own CEO, recently provided a lukewarm assessment of his company's end markets, telling reporters in Asia that the computing industry has not seen much improvement and it remains unclear when companies will start investing in information technology again.

But Barrett's comments, which prompted a selloff in Intel's shares last week, were nothing more than what the company already has said and may have been skewed by the press, Otellini said.

"There is a lot of stuff that was written around his reiteration of our existing positions that I can only nicely characterize as editorializing," Otellini said.

"He said that we are planning for a seasonal second half, and he said that the fourth-quarter holiday jump up was not a sure bet," Otellini added. "That's, of course, a fair statement to make in this environment."

As for the second half, Otellini declined to comment beyond the third quarter but suggested that the back-to-school season is not likely to be as bad as some have made it out to be.

"Back to school is no longer just calculated as U.S. retail," he said. "I think that some of the direct business and some of the channel business goes into those consumers, and you need to look at how they're doing as well to get a reflection on whether the back-to-school market is doing well or not."

"I think it is going to be less than people expected," Otellini added. "But it's probably not as poor as looking only at retail would indicate."