Analysts polled by First Call/Thomson Financial expected National Semi to earn 51 cents a share.
In October, National Semi warned that inventory corrections in the mobile phone market would hurt the company's second-quarter sales and profit margins.
Analysts originally pegged it for a profit of 71 cents a share.
The $595 million in sales represents a 16 percent improvement from the year-ago quarter, when National Semi pocketed $70.4 million, or 37 cents a share, on sales of $513.9 million.
In the quarter, National Semi said worldwide bookings fell 19 percent from the year-ago quarter. Analog bookings declined at a slower rate than the company as a whole, and new orders for some wireless products actually increased.
The company said new orders from distributors fell significantly as distributors adjusted their inventories for slowing year-over-year growth in resales. PC-related orders also slumped with the rest of the industry, reflecting the difficulty companies such as Apple Computer, Gateway and Micron Electronics have reported.
Ahead of Thursday's earnings report, Merrill Lynch analyst Joseph Osha downgraded the stock from a near-term "accumulate" recommendation to near-term "neutral."
Osha was expecting a profit of 51 cents a share on sales of around $590 million.
"We want to discourage investors from trying to bottom-tick National here," Osha said. "We think that more problems are coming. We see no intermediate-term catalysts to move the stock upwards, despite its reasonable valuation."
National Semi is now trading at a price-to-earnings ratio of 5.32.
Looking ahead to the third quarter, National Semi executives said continuing inventory adjustments in the distribution channel and seasonal weakness in the PC market will result in a 10 percent sequential decline in sales.
Gross profit margins will likely fall to between 47 percent to 48 percent, off the 50 percent previously anticipated.
National Semi CEO Brian Halla said analysts and investors should expect only a 10 percent improvement in sales for fiscal 2001 and profit margins of around 50 percent, even though the company expects market conditions to improve at the end of the calendar year.
Last quarter, National Semi easily hurdled analyst estimates, earning $149.4 million, or 76 cents a share, on sales of $640.8 million.
The stock rallied to a 52-week high of $85.94 in March before falling to a low of $17.13 earlier this month.
Twelve of the 15 analysts following the stock maintain either a "buy" or "strong buy" recommendation.
First Call expects it to earn $2.41 a share in the fiscal year.