Texas Instruments' Profit Jumps

Updated from 5:12 p.m. EDT

Brisk worldwide demand for cell phones boosted profit at Texas Instruments(TXN) by 57% in the first quarter.

The Dallas chipmaker's financial results for the three months ended March 31 came in ahead of analysts expectations and at the high end of its own estimates. And the company's outlook for the current quarter suggested that business was not showing any signs of slowing down.

"Demand was strong, and we expect it to continue," said CEO Rich Templeton in a statement.

Sales in the first quarter were $3.33 billion, up 23% from the year-ago period.

Net income jumped to $585 million, or 36 cents a share, including a 4-cent-a-share stock-based compensation expense and a profit of $43 million from discontinued operations. In the year-ago period, TI earned $411 million, or 24 cents a share, excluding stock-compensation charges but including net income of $40 million from discontinued operations.

On a continuing-operations basis, TI earned $542 million, or 33 cents a share, in the latest quarter. Analysts polled by Thomson First Call expected TI to generate $3.29 billion in sales with EPS of 32 cents.

Shares of TI rose 3.4%, or $1.14, to $35.14 in extended trading Wednesday.

The company said revenue from chips used in advanced, so-called 3G cell phones doubled year over year. Sales of analog and digital signal processors used in cell phones also showed robust growth in the quarter.

Revenue in Texas Instruments' semiconductor division, which accounts for the bulk of the company's sales, were $2.62 billion during the quarter, at the high end of its projected range of $3.15 billion and $3.28 billion.

While weakness in the market for personal computers has clouded the business outlook for microprocessor makers like Intel(INTC) and Advanced Micro Devices(AMD), TI is profiting from its position as the world's No.1 supplier of chips for cell phones. Nokia(NOK), which is TI's largest customer, recently boosted its projections for worldwide handset sales growth in 2006 from 10% to 15%.