UPDATE 2-Arbitron Q1 profit up, settles PPM dispute; shrs rise

* Q1 EPS $0.51 vs $0.46 year-ago

* Q1 rev $95.9 mln vs $98.5 mln year-ago

* Reiterates FY outlook

* Says settles Portable People Meter methodology dispute (Adds analyst comments; conference call details; updates shares) By Sudipto Ganguly

BANGALORE, April 22 (Reuters) - Media and marketing research firm Arbitron Inc (ARB.N) posted a higher quarterly profit, helped by lower costs, and said it resolved a dispute regarding its Portable People Meter (PPM) methodology, sending its shares to their highest level in 18 months.

Arbitron makes the PPM, a cellphone-sized device that electronically tracks exposure to radio, broadcast television and cable media.

The PPM, commercialized in 33 markets so far, has faced criticism from certain sections of the radio industry and state governments that the device under-represents some ethnic and age groups. [ID:nBNG524944]

"We committed to make specific enhancements to our PPM methodology as well as continue initiatives undertaken to support minority and general market broadcasters," Chief Executive William Kerr said on a conference call.

Arbitron plans to commercialize 15 new PPM markets in 2010 compared with 19 last year, the company said.

CJS Securities analyst Robert Labick termed the agreement as "a huge positive step forward".

With the agreement in place, Labick expects Arbitron to get a renewal with Spanish-language media company Univision Communications Inc [UVN.UL] and to reduce their legal expenses.

"The near-term impact of the PPM Coalition settlement is the positive in removing the high-profile critics of Arbitron's PPM roll-out," Gilford Securities analyst Jim Boyle said in an email.

The company also maintained its full year outlook. It continues to expect full-year revenue to increase 2 percent to 6 percent and full-year earnings of $1.50 to $1.75 a share.

Arbitron, the largest ratings company for radio in the United States, earned $13.7 million, or 51 cents a share, compared with $12.3 million, or 46 cents a share, a year ago. Revenue fell 2.6 percent to $95.9 million.

The current quarter included a pension settlement charge of 3 cents a share, while the year-ago quarter included a charge of 19 cents per share relating to reorganization and restructuring.

Analysts on average expected earnings of 55 cents a share, before items, on revenue of $102.4 million, for the quarter, according to Thomson Reuters I/B/E/S.

Shares of Arbitron were up 6 percent at $30.37 in afternoon trade on the New York Stock Exchange. (Reporting by Sudipto Ganguly in Bangalore; Editing by Gopakumar Warrier, Ratul Ray Chaudhuri)