By Dominic Chopping

STOCKHOLM--Volvo AB said Friday that easing Covid-19 restrictions helped truck demand recover and construction activity rebound in the third quarter, as it posted better-than-expected net profit in the period.

The Swedish truck maker said net profit for the quarter ended Sep. 30 fell 23% on the year to 5.72 billion Swedish kronor ($645.9 million), beating analysts' forecasts of SEK4.19 billion, according to a FactSet poll.

Sales dropped to SEK76.85 billion, shy of analysts' forecasts of SEK79.05 billion, while the group's adjusted operating margin fell to 9.4% from 11.0%.

Truck deliveries fell 28% in the quarter, while order intake jumped 61%, it said.

"After the easing of Covid-19 restrictions, freight activity has increased and customers are returning to previously planned replacement cycles," Chief Executive Martin Lundstedt said.

"Towards the end of the quarter transport activity was back on roughly the same level as a year ago in most markets. This led to an improved sentiment among our customers, which is reflected in increased order intake for trucks, engines and construction equipment as well as a gradually improving service business."

Volvo said that despite the ongoing pandemic making visibility low, it has reintroduced truck market guidance.

For 2020, Volvo sees the European heavy-duty truck market at 225,000 and for 2021 at 240,000. The North American heavy-duty truck market is seen at 220,000 in 2020 and at 250,000 in 2021, while in China, the heavy- and medium-duty truck market is seen at 1.65 million in 2020 and 1.45 million in 2021.

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

(END) Dow Jones Newswires

10-16-20 0213ET