UPDATE 1-Federal Signal forecasts surprise Q1 profit; shares up

* Sees Q1 EPS $0.01-$0.03 from cont ops

* Analysts see $0.07/shr loss

* Shares up 8 pct

April 13 (Reuters) - Diversified manufacturer Federal Signal Corp (FSS.N) forecast a surprise first-quarter profit as it sees lower costs from a litigation, sending its shares up 8 percent.

The company now expects earnings of 1 cent to 3 cents a share from continuing operations.

Analysts expect the company to post a loss of 7 cents a share, excluding items, according to Reuters Estimates.

Shares of the company were trading up 8 percent at $6.55 after the bell. They closed at $6.06 Monday on the New York Stock Exchange.

For alerts, please double click [ID:nWNAB2899] (Reporting by Mansi Dutta in Bangalore; Editing by Anil D'Silva)