Texas Instruments Inc. said Monday its first quarter profit rose 28 percent despite weaker sales of chips for high-end cell phones, but the company offered a cautious outlook for the second quarter due to the slowing economy.The leading maker of chips for cell phones, TI said it earned $662 million, or 49 cents per share, in the first quarter this year, compared with $516 million, or 35 cents per share, a year ago. Excluding a tax gain, the most recent profit would have been 43 cents per share. That was in line with the prediction of analysts surveyed by Thomson Financial.

Revenue rose 3 percent, to $3.27 billion, a tick below analysts' forecast of $3.28 billion.

Before the report was released, Texas Instruments shares rose 99 cents, or 3.3 percent, to $30.59. In extended trading after the report's release, they fell 72 cents, or 2.4 percent.



The Dallas-based company said it benefited from strong sales of high-performance analog semiconductors, which are widely used in a variety of industrial products and consumer gadgets such as digital cameras and music players. They make up about 40 percent of TI's revenue.

Sales of digital signal processors, used in cell phones, fell 3 percent.

Inventories also rose, and the company gave a cautious preview of the April-June quarter.

"Given uncertainty in the near-term economy, we have become more conservative with our outlook for the second quarter," said Chairman and Chief Executive Richard K. Templeton.

The company said it expected to earn 42 cents to 48 cents per share in the second quarter, while analysts were forecasting 48 cents per share.

Texas Instruments said April-to-June revenue would be $3.24 billion to $3.50 billion. Analysts were expecting $3.44 billion.

Texas Instruments faces an erosion of business from top customers Nokia and Sony Ericsson, which indicated last year they would work with several suppliers of cell phone chips instead of just TI.

Last month, Texas Instruments lowered expectations for the quarter, citing reduced sales to a big customer it didn't name that analysts widely assumed was Nokia, the world's largest cell phone maker.

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