UPDATE 2-Swedish Match Q4 profit tops forecast, sees growth

* Q4 operating profit 850 mln crowns, vs forecast 812 mln

* Proposes dividend of 4.75 crowns, vs forecast 4.85

* Says U.S., Scandinavian snuff market to grow in 2010

* CEO sees 2010 wet snuff margin around 45 percent

* Shares up 1 percent

(Adds analyst comment, CEO quotes, background)

STOCKHOLM, Feb 25 (Reuters) - Tobacco products maker Swedish Match (SWMA.ST) narrowly beat expectations for fourth-quarter operating profit on Thursday with higher sales in Scandinavia and forecast growth for smokeless products this year.

The company said the market for wet snuff -- a smokeless tobacco popular in the U.S. and Scandinavia but banned elsewhere in the European Union -- would expand in both regions this year while the tax rate would be near the same level as 2009.

Analysts had expected the fourth-quarter profit to suffer more from seasonal effects felt across the tobacco business at the year-end, when many consumers spend more time indoors and switch to cheaper brands.

"It looks pretty good ... There will be some adjustments to forecasts after this," Andreas Lundberg, an analyst at Handelsbanken Capital Markets, said.

Fourth-quarter operating profit came in at 850 million Swedish crowns ($118 million), above a forecast for 812 million in a Reuters poll and also above the 807 million profit in the 2008 period. [ID:nLDE61M13Q]

Shares in the firm were up 1.9 percent to 163.90 crowns by 1044 GMT.

WET SNUFF MARGIN

Swedish Match recently signed a deal with U.S. tobacco giant Philip Morris (PM.N) in an attempt to introduce smokeless tobacco to new markets where cigarettes hold sway.

The effort is still in its early stages, but analysts say growth opportunities could open up as governments around the world crack down on cigarette smoking in public.

Robust sales of wet snuff in Scandinavia, where the product is a favourite among males, compensated for a small dip in U.S. sales during the quarter as well as the negative effects of currency translation, the company said in a statement.

Fourth-quarter operating margin for wet snuff rose to 47.5 percent in the quarter, compared with 48.8 percent in the preceding three months and higher than the 46.6 percent seen in the poll.

Chief Executive Lars Dahlgren said the wet snuff margin for 2010 would come at a level similar to last year -- 45.1 percent -- with growth of around 5 percent in the U.S. market.

"The 2009 full-year margin (for wet snuff) can be seen as a reasonable indication of the level we can expect in 2010," he told Reuters. "Now we think a reasonable forecast is somewhere around 5 percent for the American market."

Swedish Match proposed a dividend of 4.75 Swedish crowns per share versus a median forecast of 4.85 crowns. (Reporting by Nick Vinocur and Katarina Gustafsson; Editing by Jon Loades-Carter)