Pretax profits rose to 545 million Swedish crowns ($66.97 million) in the quarter from 102 million a year ago, shy of the average forecast of 673 million in a Reuters survey. It made a pretax profit of 590 million crowns in the second quarter.
"The results were a notch down from my expectations ... but nothing to talk about," said Jyske Bank analyst Brian Borsting.
Results were hit by SAS's airline support business, which includes ground handling and maintenance. Operating profit in the unit was 42 million crowns, down from 305 million in the same period a year earlier.
Borsting said cost savings of 2 billion crowns identified by SAS for 2006-2007, which come on top of its Turnaround 2005 programme, were "a positive surprise".
"I expected around 1 billion," he said.
Chief Financial Officer Gunilla Berg said the majority of the new savings would come in 2006.
"We can lower costs across all our units," Berg said at a press conference.
She said the airline could push through further productivity gains particularly among pilots and cabin staff and further simplify its business model and sales methods.
SAS, like other national flag-carriers, has been hit hard by competition from low-cost airlines such as Ryanair, surging fuel costs and a slump in air travel after the September 11, 2001, attacks on the United States.
But passenger traffic has revived, and the firm is nearing the end of a 14 billion crown cost-cutting programme, which it repeated should see it return to profit this year. SAS has also cut prices and capacity and introduced new one-way fares.
"Everything is pointing in the direction of a positive result," Chief Executive Jorgen Lindegaard told analysts on a conference call.
SAS said it had 500 million crowns left to achieve of its Turnaround 2005 programme, which should have a positive impact on next year's earnings of 1.6 billion crowns.
It said its unit costs were down 5.1 percent this year, adjusted for fuel, while its load factor - or how efficiently it fills planes - rose to over 70 percent in October.
Revenue per passenger for each kilometre flown - the yield - is under pressure from lower ticket prices, but SAS said this should be offset by rising volumes. SAS said overcapacity, particularly in Copenhagen, was easing.