NEW YORK (CNN/Money) - Texas Instruments, the leading supplier of digital signal processors used in cell phones, reported sharp gains in first quarter sales and earnings as consumers continue to gobble up cell phones and other electronics devices featuring TI's chips.

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Earnings came in line with Wall Street's expectations and sales were slightly higher than forecasts. TI raised its earnings and sales guidance for the quarter in March. The stock rallied after-hours on the news.

The Dallas-based company reported net income of $367 million, or 21 cents a share, an increase of 214 percent from earnings of $117 million, or 7 cents a share a year ago.

TI's sales rose 34 percent from a year ago, to $2.94 billion, slightly higher than the Wall Street consensus estimate of $2.9 billion.

"TI's strong wireless growth from the year-ago period continued to outpace the industry's handset shipments, which we believe reflects the company's increasing content per phone," said TI chairman and CEO Tom Engibous in a statement.

Shares of TI (TXN: Research, Estimates) fell 30 cents, or 1 percent, to $28.68 in regular trading on the New York Stock Exchange Wednesday. The stock has fallen more than 7 percent during the last week, following a sales and earnings warning from Nokia, TI's largest customer.

Based on TI's strong results though, fears of a spillover effect from Nokia (NOK: Research, Estimates) appeared to be for naught and the stock gained 1.8 percent after-hours as a result.

TI also gave a rosy second quarter outlook, saying that sales should be in a range of $3.085 billion to $3.325 billion. Analysts were expecting revenue of $3.06 billion. The company also said it expects earnings to be between 23 cents and 26 cents a share. The consensus estimate was 23 cents.

"My fear was that if Nokia gets a cold, will TI sneeze in terms of the guidance? It doesn't look like it. The low end of their sales guidance was higher than the consensus estimate," said Erach Desai, an analyst with American Technology Research.

TI posted strong gains in its core semiconductor business, which accounted for 88 percent of the company's total revenue. (TI also sells sensors, controls and calculators.)

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The company said that the semiconductor strength was led by robust sales of digital signal processors, which are used in DSL and cable modems as well as cell phones, despite the Nokia weakness. In addition, TI said that sales of analog chips and digital light processing chips, which are used in flat-screen TVs, were extremely strong.

"This shows they have other wireless customers in their lineup that could help them. Wireless had some bumps but it was still a good quarter and you had other products picking up the pace," said Ren Zamora, an analyst with Loop Capital Markets. He added that he expects the stock to recover from last week's losses, following this reassuring report.

During a conference call with analysts, TI chief financial officer Kevin March said the company expects profit margins to head higher over the next few quarters as demand increases and chip pricing continues to firm.

TI's gross margins, which measure how profitable a company is after subtracting the cost of sales, came in at 45 percent for the first quarter, up from 43.1 percent in the fourth quarter and 39.3 percent a year ago.

The results were the second strong semiconductor earnings report in as many days. Linear Technology (LLTC: Research, Estimates), which makes analog chips used in a variety of consumer electronics devices, reported better than expected earnings and sales for its fiscal third quarter.

Desai said that TI's and Linear's results represent a stark contrast to Intel (INTC: Research, Estimates), which disappointed investors Tuesday by posting lower than expected first quarter sales and giving a weaker than anticipated outlook.

He said investors should focus less on Intel's weakness and more on TI's solid numbers because Intel is tied so closely to the personal computer market, which is a slower growth area than wireless communications and consumer electronics.

"Investors are used to banking on Intel as the semi bellwether," he said. "But the semiconductor cycle is robust and healthy."

Analysts quoted in this story do not own shares of the companies mentioned and their firms have no investment banking ties to them.