Estee Lauder ( EL) reported a 10% rise in second-quarter profit Thursday, but a lowered outlook for the full year had investors wrinkling their noses.

The company said earnings totaled $138.3 million, or 60 cents a share, for the quarter, up from $126.3 million, or 54 cents a share, a year earlier. The results exceeded Wall Street's expectations, which called for earnings of 57 cents a share, according to consensus estimates reported by Thomson First Call.

"We continue to benefit from our global sourcing and manufacturing initiatives as well as ongoing cost-containment efforts," the company said in a statement. "These enable us to increase our marketing expenditures to further enhance our brands while meeting our profitability goals."

For all of fiscal 2005, the company said it foresees earnings in a range of $1.88 to $1.93 a share. Wall Street had set the bar higher, with a range of 1.89 to $1.95 a share. The guidance prompted selling in the stock Thursday, recently down 30 cents, or 0.7%, to $45.05.

The New York-based cosmetics giant, whose brands include Clinique and Aveda, said its sales for the quarter rose 8.1% to $1.75 billion, from last year's $1.62 billion. Excluding the effects of the weaker dollar, the increase was 5%. Sales of makeup and hair-care products both rose by double-digit percentages for the quarter. Skin-care sales increased 8%, and fragrance sales were up 3%.