By Dominic Chopping

STOCKHOLM--Tele2 AB on Tuesday reported a forecast-beating third-quarter net profit and backed full-year guidance.

The Sweden-based telecom company posted a net profit for the quarter of 1.04 billion kronor ($120.2 million) down from SEK1.14 billion a year earlier.

Analysts polled by FactSet had expected SEK980 million.

Underlying earnings before interest, taxes, depreciation, amortization and the cost of leased assets, or Ebitdaal--the company's preferred metric--rose 4.5% to SEK2.58 billion, driven by end-user service revenue growth, cost savings, and less headwinds related to the pandemic.

Revenue edged higher to SEK6.64 billion from SEK6.54 billion, versus SEK6.67 billion expected.

"Looking ahead, we expect activity to pick up in our markets in 4Q and are ready to take on that challenge," said Chief Executive Kjell Johnsen.

"We will continue to work on the balance between value and volume and feel that we are well on track to deliver on the targets."

For 2021, the company still sees flat to low-single-digit growth in end-user service revenue, underlying Ebitdaal growth of mid-single-digits and capital expenditure excluding spectrum and leasing assets of SEK2.8 billion-SEK3.3 billion.

Write to Dominic Chopping at dominic.chopping@wsj.com