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* Sweden's Skanska Q4 pretax down 96 percent, hit by writedowns
* Finland's YIT operating profit drops 55 percent
* Skanska holds dividend, YIT cuts -- both as expected
* Skanska defers financial targets, YIT scraps goals
* Shares in both firms higher in early trade (Updates with comments, shares, adds Finnish firm YIT)
STOCKHOLM, Feb 6 (Reuters) - Swedish construction firm Skanska reported unexpectedly large fourth-quarter writedowns on Friday, wiping out nearly all its profit, and said it no longer expected to meet its 2010 financial targets.
Finland's YIT was also hammered by the global economic downturn, with quarterly operating profit plunging 55 percent. It said it could not give an outlook and scrapped its revenue and profit targets.
Skanska's pretax profit plummeted 96 percent to 71 million Swedish crowns ($8.6 million) versus a year-earlier 1.73 billion and a mean forecast of 625 million in a Reuters poll of 10 analysts. The firm said demand had weakened across the board.
But Skanska kept its regular dividend at 5.25 Swedish crowns and one analyst said that excluding the writedowns the report was reasonably good. Skanska shares gained 6.5 percent by 0830 GMT.
"Adjusted for all the one-offs it looks pretty good, underlying. It's good they kept the dividend at last year's level, and the order intake roughly met expectations," said the analyst, who asked not to be identified.
Skanska had targeted a 4.0 percent operating margin for its construction business in 2010 and a 12 percent margin for its smaller residential business.
"Due to the financial turbulence and weaker market outlook for Skanska, it is not realistic to keep the timing for our financial targets set for 2010," Skanska said.
Skanska said it made writedowns and provisions of 1.27 billion crowns in the quarter.
Of these, 649 million were related to project development, 519 million to staff cuts and 98 million to additional warranty provisions in discontinued operations. Skanska had said in November it would cut 3,400 jobs in the region and take a fourth-quarter restructuring charge of 600 million crowns.
TOO MUCH UNCERTAINTY
YIT said operating profit in the quarter totalled 48.4 million euros, below all estimates in a Reuters poll of analysts.
YIT said it could not yet give an outlook for 2009 due to the economic uncertainty, and also scrapped its revenue growth and operating profit targets.
"The revenue and profit uncertainties are related to the general economic environment and its impact on building and repair investments, as well as housing sales in Finland and Russia," YIT said in a statement.
The firm slashed its dividend to 0.50 euros per share from 0.80 euros. The average estimate in the poll was for 0.52 euros.
But the company's chief executive said two-thirds of its order backlog was "quite solid" and it has seen good elements in Finnish and Russian housing markets to start the year.
YIT shares were up 4.8 percent at 0830 GMT.
(Reporting by Oskar von Bahr, Anna Ringstrom and Adam Cox in Stockholm and by Brett Young in Helsinki; editing by John Stonestreet and Rupert Winchester)