Updated from Oct. 24

Shares of Texas Instruments ( TXN) slipped after the chipmaker's third-quarter report delivered merely an expected top-line performance, while projections for the fourth quarter promised nothing better.

The stock was recently off $1.57, or 5.1%, in early Tuesday trading.

The company said late Monday that earnings for the quarter ended Sept. 30 were $638 million, or 38 cents a share, as compared to $563 million, or 32 cents a share, a year earlier.

The latest quarter included expenses of 3 cents a share for additional stock compensation, while higher-than-expected taxes hurt the bottom line by a penny a share.

Excluding these items, the company earned 42 cents a share, but it was unclear whether the Thomson First Call estimate of 40 cents a share also excluded the one-penny tax hit.

Revenue rose to $3.59 billion, up 11% sequentially and up 10% from a year earlier. The results just edged $3.55 billion, which marked both the midpoint of the company's own guidance and the consensus expected by analysts.

According to the company, the results owed to strong demand for its digital signal processor and analog chips used in cell phones and other communications devices. With $3.13 billion in revenue, the company's semiconductor division provided the strongest growth engine, increasing 13% from the previous quarter. The growth was the semiconductor division's highest in 15 years, the company said.

The strong showing in semiconductors, said Chief Financial Officer Kevin March, was broad-based, reflecting solid growth in various markets. Wireless chip revenue was up 16% from the prior quarter, thanks to increasing demand for chips designed for both feature-rich 3G cell phones and low-priced handsets sold in emerging markets like China, India and Africa. The company's digital light processors, used in displays and projectors, had revenue growth of 40%. Much of this growth however, reflected a shortage of DLP chips in previous quarters.

"We have had multiple years now of working hard on improving our total product portfolio and improving our overall manufacturing strategies, and that work is paying off," said March.

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