STOCKHOLM, May 8 (Reuters) - Swedish builder Skanska

reported a smaller-than-expected rise in operating

earnings for the first quarter on Wednesday as profits in its

bread-and-butter construction business recorded a year-on-year

fall.

The Nordic region's biggest construction group said

operating earnings rose to 497 million crowns ($45.6 million)

from a year-ago 394 million, lagging the 873 million seen in a

LSEG compilation of analysts' forecasts.

The company, which is also a significant player in the

U.S. construction market, said construction results were solid

in the Nordic and U.S. markets but that its European business

had been hit by costs related to a ten-year-old project in

Britain.

($1 = 10.8929 Swedish crowns)