Quarterly operating earnings at the maker of the Gripen fighter jet fell to 882 million Swedish crowns (£78.59 million) from 960 million in the year-ago quarter, lagging the the 1.1 billion crowns seen in a Reuters poll of analysts.

The company said profitability had been hit by a change in product mix within business area Dynamics, which makes products such as combat weapons, missile systems, torpedoes and unmanned underwater vehicles.

Saab proposed a dividend of 5.50 crowns per share, up from 5.25 crowns a year earlier, but below a 6.15 crown mean forecast.

The company said it expected like-for-like sales to rise around 5 percent in 2018, while its operating margin, excluding material non-recurring items, was seen improving compared to 2017.

(Reporting by Johannes Hellstrom, editing by Nerijus Adomaitis)