Updated from 5:57 p.m. EDT

Texas Instruments

(TXN) - Get Report

, the Dallas-based maker of computer chips for mobile phones, reported a 37% increase in its second-quarter earnings Monday, edging past Wall Street's expectations, as it predicted accelerated growth in the semiconductor business.

For the second quarter ended June 30, pro forma net income was $525 million, or 31 cents a diluted share, compared with $384 million, or 23 cents a share, reported in the year-earlier quarter. Analysts polled by

First Call/Thomson Financial

had forecast earnings of 30 cents a share for the latest quarter.

The company's stock price rallied in post-close trading after officials predicted accelerated sequential growth in semiconductor sales and revenue growth in the wireless business. Officials also predicted growth in hard-disk drive revenues, which have fallen for a year.

Including a pretax gain of $1.21 billion from the sale of 20 million shares of

Micron Technology

and $52 million in acquisition-related charges, Texas Instruments posted net income of $1.28 billion, or 75 cents a diluted share.

The company said total revenues rose 18%, to $2.84 billion, from $2.4 billion in the year-earlier quarter.

Shares of the company's stock surged to 67 5/8 in after-hours trading, according to

Instinet

. Shares had closed up 1/2 at 63 before the earnings were reported after the stock market's close.

"We would probably have liked to have seen a little bit stronger growth in the second quarter," said Bill Aylesworth, the company's chief financial officer, citing component shortages and slow demand. "Our expectation is for sequential growth in the third quarter at least as high as the rate in the second quarter."

But asked by analysts during a conference call whether that meant double-digit sequential revenue growth was in the offing, Aylesworth sought to diminish expectations. Instead, the company expected growth rates that were "certainly more modest than that but certainly above the 6% we saw in the second quarter," he said.