Operating profit at the Gripen fighter jet maker was up 16% from a year earlier to SEK1.37 billion (US$145.5 million) against a mean forecast of SEK1.38 billion in an LSEG poll of analysts, on organic sales growth of 18%.

Saab is scaling up production amid soaring military spending in Europe due to Russia’s invasion of Ukraine.

The spending boom, further underlined by Nato members committing to defence budget increases demanded by US President Donald Trump, has lifted stocks of military equipment makers, with Saab’s shares soaring 111% this year alone by yesterday’s close.

“Market activity was high and demand was strong,” CEO Micael Johansson said in the report.

“We are well positioned to capture growth opportunities. In parallel, we are increasing investments in new technology and research and development”, he said.

Sweden this week signed a long-term cooperation agreement with Ukraine over air defences that includes the possibility of exporting 100 to 150 new Gripen E in what would easily be Sweden’s biggest ever aircraft export order.

Saab, whose products range from missiles and advanced electronics to submarines, raised its like-for-like full-year sales growth forecast to 20%-24%, even as order intake shrank slightly in the quarter.

Its previous forecast, from July, was for 16%-20% growth.

It reiterated that it expects operating profit to rise even faster than sales.

Order bookings amounted to SEK20.9 billion in the quarter and the order backlog stood at SEK202.4 billion.