UPDATE1-Inverness Medical Q2 profit misses Wall Street

(Recasts; adds details, background, share movement)

July 29 (Reuters) - Diagnostic-kit maker Inverness Medical Innovations IMA.A reported second-quarter adjusted earnings that missed market estimates, hurt by a charge associated with an arbitration decision.

The maker of home-pregnancy and fertility-monitoring tests earned $32.7 million, or 37 cents a share, excluding certain charges, compared with $11.8 million, or 24 cents a share, a year earlier.

Net revenue rose about 159 percent to $401.1 million, helped by a 169 percent increase in product and service revenue in its professional diagnostics segment.

Analysts were expecting earnings of 42 cents a share, before special items, on revenue of $398 million, according to Reuters Estimates.

Including amortization, restructuring charges and other items, the company posted a net loss of $30.3 million, or 43 cents a share, for the latest second quarter, compared with net income of $54.7 million, or $1.17 a share, a year earlier.

Inverness Medical has spent about $3.5 billion on acquisitions over the past two years, including disease management services provider Matria Healthcare Inc and heart disease diagnostics firm Biosite Inc.

Shares of the company, which is in $1.2 billion joint venture talks with private equity groups for its health management business, were up about 4 percent at $31.10 in trading before the bell. Shares closed at $30.00 Monday on Nasdaq. (Reporting by Suzannah Benjamin in Bangalore; Editing by Bernard Orr)