Image source: Texas Instruments.

Shares of Texas Instruments (NASDAQ:TXN) jumped more than 4% higher in after-hours trading on Wednesday, following the release of first-quarter results.

The semiconductor designer and manufacturer saw GAAP earnings increase by 38% year over year, landing at $0.44 per share. At the same time, sales grew 3% to $3.0 billion. Free cash flows expanded by 8% to $385 million.

Analysts were expecting earnings of $0.41 per share on on $3.0 billion in total revenue. Texas Instruments met the Street's sales targets while sailing past earnings estimates.

Sales increased by double-digit percentages in the core analog and embedded divisions, while legacy products saw 28% lower sales. The company is actively moving out of certain low-margin markets, such as wireless radio chips.

Looking ahead, the midpoint of Texas Instruments' revenue guidance for the second quarter sits at $3.3 billion. Earnings guidance points to roughly $0.59 per share, give or take $0.04. Both numbers are comfortably higher than the prevailing analyst view.

Over the past four quarters, Texas Instruments has increased dividend payments by 48% while boosting share buybacks by 34%. The company aims to return all of its free cash flows to investors, except for funds going into debt repayments.

This strategy, said CEO Rich Templeton in a prepared statement, "reflects our confidence in the long-term sustainability of our business model. In the past twelve months, we returned 99 percent of this targeted amount."