UPDATE 2-Valassis Q1 profit tops Street, ups FY view; shrs rise

* Q1 adj EPS $0.41 vs est $0.30

* Q1 rev $550 mln vs est $551.5 mln

* Raises FY outlook

* Shares up 10 pct (Adds analyst comments, details; updates share movement)

By Sudipto Ganguly

BANGALORE, April 29 (Reuters) - Valassis Communications Inc VCI.N posted a quarterly profit that beat market expectations, partly helped by lower costs, and raised its 2010 outlook, sending shares to their highest levels in over four years.

For 2010, the distributor of newspaper inserts now expects adjusted earnings of $2.79 a share, up from its prior view of $2.48.

“Given their longer-term contracts enabling better visibility than many other media, Valassis’ improved outlook seems achievable ... (and it) doesn’t seem to require any heroic assumptions,” Gilford Securities analyst Jim Boyle said in an email reply.

“First-quarter revenue was essentially in line, but more importantly it affirms that the several prior quarters’ revenue declines during the economic recession (and advertising depression) is largely behind us,” Boyle said.

First-quarter net earnings were $322.5 million, or $6.26 a share, compared with $13.0 million, or 27 cents a share a year ago. Excluding litigation settlement proceeds, the newspaper coupon company earned 41 cents a share.

Revenue fell marginally to $550 million in the quarter ended March 31, 2010.

Analysts had expected profit of 30 cents a share, excluding items, on revenue of $551.5 million, according to Thomson Reuters I/B/E/S.

Shares of Livonia, Michigan-based Valassis were trading up about 8 percent at $31.43 in afternoon trade Thursday on the New York Stock Exchange. They touched a high of $32.19 in morning trade. (Reporting by Sudipto Ganguly in Bangalore; Editing by Don Sebastian)