(AP) - Sharply rising gas and raw materials costs led to a 10 percent drop in second-quarter profit at Kleenex maker Kimberly-Clark Corp., which said Thursday it may raise prices again in the U.S. and other markets.

Chief Executive Thomas Falk said the Dallas-based company had raised prices in the U.S. and other markets to offset the higher energy and input costs but that those increases hadn't kept up with the rise in commodities.

"The reality is that the rapid run-up in commodity costs has outpaced our ability to offset inflation in the near-term with price increases and other actions," Falk told investors.

Kimberly-Clark, which also makes Huggies diapers, Scott toilet paper and Viva paper towels, earned $416.7 million, or 99 cents per share in the quarter, down from $461.8 million, or $1 per share, a year ago. Excluding one-time costs, Kimberly-Clark earned $1.03 per share.

Revenue rose 11.2 percent to $5 billion from $4.5 billion.

Thomson Financial said analysts, who typically exclude one-time costs, expected Kimberly-Clark to earn $1.03 per share on $4.98 billion in revenue.

Kimberly-Clark had warned Wall Street last week that it expected to miss earlier estimates on profit, and its shares fell $1.34, or 2.4 percent, to $55.35 Thursday as the company warned that its price increases could hurt sales.

Falk said during a conference call that the higher energy & commodity costs this year would total as much as $900 million, or double what the company had predicted at the beginning of the year. For the quarter, Kimberly-Clark said it had cost inflation of $180 million, including $70 million for fibers, $55 million for non-fiber materials, $30 million for energy and $25 million for distribution.

Demand for paper towels had weakened given the price increases, Falk said, and coming price hikes could also affect tissue sales volume in the U.S.

Goldman Sachs analyst Andrew Sawyer said in a research note that the lower volume would be worth the margin benefit on tissues.

Overall, Sawyer said, "Sales behavior remains relatively solid, led by emerging markets and continued solid personal care sales."

Revenue from personal care products worldwide rose 15 percent in the quarter - with 4 percent due to a weak dollar - while volume rose by 9 percent. In North America, personal care sales increased 10 percent while volume rose 8 percent, boosted by growth in diapers and other child care products.

Emerging markets had a 25 percent increase in personal care sales, with especially strong growth in Latin America, South Korea, China, Russia, Turkey and Vietnam.

The company reaffirmed its expectation that third-quarter earnings would be in a range of 98 cents to $1.03 per share and full-year earnings would be $4.20 to $4.30 per share.