The chipmaker posted a profit of $39.2 million, or 21 cents a share, on sales of $475.6 million, including a $12.1 million pretax charge.
First Call consensus expected National Semiconductor to earn 20 cents a share, an adjustment made after the company twice warned that it would miss estimates.
Analysts originally expected the company to earn 31 cents a share in the quarter.
Excluding charges, National Semiconductor earned $48.9 million, or 27 cents a share.
National Semiconductor shares fell 97 cents to $23.87 in early afternoon trading.
In the year-ago quarter, it earned $99.8 million, or 51 cents a share, on sales of $548.9 million.
Company executives told analysts to expect fourth-quarter sales to slide as much as 10 percent from the $475.6 million it recorded this quarter and earnings of only 3 cents to 5 cents a share.
First Call consensus pegged National Semiconductor for a profit of 23 cents a share on sales of $490 million in the fourth quarter.
Gross profit margins could decline as much as 5 percent from the 49 percent it enjoyed this quarter due to lower factory utilization.
Total sales in fiscal 2001 are expected to "marginally exceed" the $2.1 billion it recorded in fiscal 2000.
"We will continue to focus on profitability and critical investments during this period of slower demand and inventory corrections in the wireless handset and PC markets," Chief Executive Officer Brian Halla said in a statement. "Although we saw bookings and turns orders improve in February, we are still maintaining a cautious outlook."
Bookings in the third quarter fell 30 percent from the second quarter and 38 percent from the year-ago quarter.
Last quarter, National Semiconductor topped analysts' reduced estimates when it pocketed $106.7 million, or 56 cents a share, on sales of $595 million.
Its shares raced up to a 52-week high of $89.94 last March before diving to a low of $17.13 in November.
Thirteen of the 14 analysts tracking the stock rate it either a "buy" or "strong buy."