Updated from 8:31 p.m. EDT

Texas Instruments ( TXN) grew its sales 24%, meeting Wall Street's expectations on the top and bottom lines.

The healthy financial results, after strong reports from TI customers Motorola ( MOT) and Nokia ( NOK) earlier this month, defy fears that demand for cell phones is at risk of drying up -- at least for the industry leaders.

TI said it continued to benefit from demand for advanced, feature-rich cell phones as well as the low-cost handsets sold in developing countries -- both of which employ its chips -- in the three months ending June 30.

But the Dallas chipmaker also said that demand in the second quarter was broad-based, pointing to products such as DLP chips for high-definition televisions and microcontrollers used in industrial machines.

"There really is no one area that I would point to that I would say wasn't growing sequentially or year over year," said CFO Kevin March.

Revenue in the second quarter totaled $3.7 billion, with income from continuing operations of $739 million, or 47 cents a share, compared with $2.97 billion in revenue and 36 cents EPS a year ago.

Analysts polled by Thomson First Call were looking for TI to report $3.68 billion in revenue with 47 cents EPS for the recently ended quarter.

Investors bid up shares $1.01 in recent after-hours trade to $28.85.

Net income, including a gain from the sale of the sensors and controls business, totaled $2.39 billion.

TI's earnings included 3 cents a share of stock-compensation expenses and a benefit of 5 cents a share from a tax benefit and a previously announced royalty settlement with Conexant Systems ( CNXT).

TI had gross margin levels of 51.6% in the second quarter, vs. 50.1% in the first quarter. Inventory in the second quarter edged up $89 million to $1.34 billion, but days of inventory, at 67 days, remained the same as in the first quarter.

The wireless market continued to lift TI's sales. According to the company, which is the world's No. 1 maker of chips for cell phones, wireless semiconductor sales grew 27% year over year, with more than 70% growth for chips used in advanced, so-called 3G phones.

Analog and DSP chips, the two main types of semiconductors used in cell phones, posted 23% and 24% year-over-year sales growth, respectively.

With the PC business going through a period of slow growth in recent months, cell phones and other consumer-electronic devices have been critical businesses for semiconductor companies.

Rising energy prices and interest rates, though, have produced concern among investors that consumer demand for electronic gadgets could be on the verge of slowing down.

TI maintained that it was business as usual, albeit with a somewhat cautious tone.

"Going into the third quarter, our backlog of orders is up, and our outlook is for seasonal growth," TI President Rich Templeton said in a statement.

"As always we will pay close attention to the world's economies and to our inventory in the various market channels," Templeton said.

The company projected third-quarter sales of $3.63 billion to $3.95 billion with EPS between 42 cents and 48 cents.

Analysts pegged TI's third-quarter revenue at $3.82 billion, with earnings of 45 cents a share.

According to TI executives, normal seasonal growth for the company's semiconductor business going into the third quarter ranges between 0% and 9% sequential increase.

In a conference call, TI Investor Relations Manager Ron Slaymaker acknowledged that escalating tensions in the Middle East as well as other macroeconomic factors could keep chip sales on the low end of the range if conditions created a change in consumer behavior.

As it stands now however, TI executives said they weren't worried about the inventory levels of wireless chips, adding that TI had better visibility into customer demand than it has had in recent quarters.

"Everything we're seeing at this point is that we should expect a solid third quarter," said CFO March.

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