UPDATE 1-Applied Materials profit, revenue top estimates on higher chip demand

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Feb 14 (Reuters) - Applied Materials Inc, the world's largest supplier of tools for chipmakers, reported first-quarter profit and revenue above Wall Street estimates, driven by higher demand for flat panel displays and chips used in electronic items.

Shares of the company rose 2.2 percent to $53.11 in after-market trading on Wednesday.

Sales from its semiconductor business, its largest, jumped 32 percent to $2.84 billion.

Sales from its display business which makes flat panel screens for televisions, PCs and smartphones rose 7.8 percent to $455 million.

Net income fell to $135 million, or 13 cents per share, in the quarter ended Jan. 28, from $703 million, or 65 cents per share, a year earlier.

The company took a charge of $1 billion due to the recent changes in the U.S. tax law.

Excluding items, the company earned $1.06 per share, beating the average analyst estimate of 98 cents per share, according to Thomson Reuters I/B/E/S.

Total net sales rose 28 percent to $4.20 billion in the quarter, above the Wall Street estimate of $4.12 billion.

The company said it also approved a $6 billion share repurchase plan. (Reporting by Arjun Panchadar in Bengaluru; Editing by Arun Koyyur)