Kimberly-Clark Corp. (KMB) Thursday posted higher second-quarter profit as cost cutting and sales of new versions of its diaper and training pants helped offset higher raw material costs.

The company also raised its targets for cost cuts for the year and for share repurchases.

The Dallas-based maker of Kleenex (search) tissues and Huggies (search) diapers posted profit of $454.3 million, or 90 cents a share, up from $417.3 million, or 82 cents a share, a year ago.

In April, the company forecast a profit of 87 cents to 89 cents a share in the quarter. Analysts on average forecast 89 cents a share, according to Reuters Estimates.

Kimberly-Clark shares dipped 54 cents to $63.16 on Thursday on the New York Stock Exchange, with some analysts noting the stock price might be too high given the company's growth forecast.

"We find it a bit troubling to pay a market multiple for a company that is targeting single-digit EPS growth for the year," William Steele, analyst at Banc of America Securities, said in a research note. He rates the stock "sell."

Sales rose 6.5 percent to $3.78 billion. Analysts on average forecast $3.54 billion, according to Reuters Estimates. Volume rose 5 percent and the weak dollar added 3 percentage points to sales growth but average selling prices were down 2 percent for the quarter due to tough competition.

Soaring prices for raw materials, especially pulp, have driven up costs for Kimberly-Clark and competitors like Procter & Gamble Co. (PG). Those companies have recently raised prices on tissue products in order to make up at least some of those higher costs.

The "outlook is encouraging, especially as the second half of the year will be supported by a retail tissue price increase in the U.S.," Lauren Lieberman, analyst at Credit Suisse First Boston said in a research note, referring to the consumer tissue business. She rates the stock "outperform."

Kimberly-Clark said it expects earnings for the full year to be at the high end of its $3.55 to $3.65 a share range. Analysts on average forecast $3.65 a share, according to Reuters Estimates.

For the third quarter, the company forecast 88 cents to 90 cents a share.

Kimberly-Clark said it is now targeting $1.4 billion in share repurchases for the year, up from $1 billion, and said it now expects $175 million to $200 million in cost cuts, up from a previous forecast of $150 million.

Kimberly-Clark is planning to cease diaper manufacturing in its New Milford, Conn., plant and move some capacity from two facilities in Britain to other growing markets.

The company expects about $40 million in costs related to the plan.