UPDATE 2-Arbitron Q2 profit up; cuts FY rev view; shares fall

* Q2 EPS $0.13 vs $0.02 yr-ago * Q2 rev up 10 pct

* Lowers full-year revenue forecast

* Keeps FY EPS view of $1.40-$1.55

* Shares fall as much as 14 pct (Adds conference call details, analyst comments, share movement)

By Manasi Phadke

BANGALORE, July 21 (Reuters) - Arbitron Inc's (ARB.N) second-quarter profit surged nearly six-fold, but the media and marketing research firm cut its revenue forecast for the year, citing the impact of a "continuing advertising recession".

Shares of the largest U.S. radio ratings company, which kept its full-year earnings outlook, fell 13 percent to $15.01 in afternoon trade, making them one of the top percentage losers on the New York Stock Exchange.

In the first half of the year, Arbitron's software sales and qualitative offerings fell about 5 percent, and it does not expect that to turn around any time soon, Chief Financial Officer Sean Creamer said on a conference call with analysts.

The cut in the revenue outlook was also exacerbated by Univision Radio, a unit of Hispanic broadcaster Univision Communications Inc, not intending to renew its contract for Portable People Meter (PPM) ratings in certain markets, Creamer added.

PPM is a portable, cellphone-sized device that electronically tracks exposure to radio, broadcast television and cable media as consumers wear it.

Arbitron expects full-year revenue to increase 2 percent to 6 percent, compared with its earlier forecast of a 6 percent to 10 percent growth.

The company maintained its full-year earnings outlook at $1.40 to $1.55 per share.

For the second quarter, Arbitron earned $3.5 million, or 13 cents a share, compared with $600,000, or 2 cents a share, a year ago. Revenue rose about 10 percent to $86.8 million.

Analysts were expecting earnings of 9 cents a share, before items, on revenue of $87.4 million, according to Reuters Estimates.

The second-quarter results were helped partly by the commercialization of the PPM in Boston, the company said.

Arbitron has reported a double-digit growth at a time when most companies are not reporting growth in their revenue, even though its major clients come from an industry that is struggling, Gilford Securities analyst James Boyle said.

"Their main clients -- the radio stations -- were off 24 pct in the first quarter and are likely to be off somewhat similar in the second quarter," he added.

Arbitron has been moving to the PPM technology, which will replace the legacy non-electronic diary service.

The company said it plans to introduce electronic measurement of radio audiences in 13 additional markets during the rest of the year.

"When they commercialize, the PPM fee is 65 percent higher than the diary fee," Boyle said. "That's why you get the boost."

PPM has been commercialized in 20 markets, the latest being Miami, Phoenix, San Diego, Seattle and Minneapolis.

The device is under investigation by U.S. lawmakers, who have said it underrepresents certain ethnic and age groups. (Editing by Aradhana Aravindan and Deepak Kannan)