There are a few different ways to practice the third move in Heian Yondan. We keep the open hands high, as we step up and forward with the left leg.
As the left leg starts to move, the left arm pushes to the right, in fron of the right hand, so both hands are high and close together. At this half way point, both knees should be heavily bent.
Next drive off the right leg and land in zenkutsu dachi (front satnce) with Juji Uke Gedan (low X block). The body should finish in the shomen (square facing) position.
As with all the kata moves, there are several applications for this move, I prefer the block and striking applications rather than the blocking of a kick, but again, this is down to personal preference.