UPDATE 3-Xerox revenue rises but posts loss on legal charge

(Recasts, adds results, analyst comment, stock activity, byline)

By Franklin Paul

NEW YORK, April 18 (Reuters) - Xerox Corp (XRX.N: Quote, Profile, Research) posted better than expected quarterly revenue and voiced optimism about its profitability on Friday, overshadowing a $491 million charge related to securities settlement that resulted in a net loss.

Shares rose 2 percent at Xerox, the top provider of digital printers and document management services, which has rebounded from fiscal troubles earlier this decade, spurred by solid profits and market share gains, despite tepid sales growth.

The Stamford, Connecticut-based company posted a first- quarter loss of $244 million, or 27 cents a share, compared with a profit of $233 million, or 24 cents a share, a year earlier.

The litigation cost, which included reserves set aside for other pending cases, related to the settlement of a securities lawsuit dating back to 2000. Xerox previously said it would make payouts in the settlement in five installments this year.

Excluding a charge of 54 cents a share for the litigation, Xerox earned 27 cents a share, in line with analyst views, according to Reuters Estimates.

Total revenue rose 13 percent to $4.34 billion, fueled by a an 11 percent increase in sales of supplies and services -- also known as "post-sale." The company said post-sale now represents more than 70 percent of total revenue.

Analysts had expected revenue of $4.23 billion.