DEARBORN, Mich. (Reuters) - Ford Motor Co F.N on Wednesday cut its forecast for operating profit for the year after a disappointing third quarter that Chief Executive Jim Hackett blamed on higher warranty costs, bigger discounts and weaker than expected performance in China.

FILE PHOTO: The Ford logo is seen at the North American International Auto Show in Detroit, Michigan, U.S., January 15, 2019. REUTERS/Brendan McDermid

Investors sold off Ford shares, which fell 2.5% to $8.98 in after-hours trading while shares in electric car maker Tesla Inc TSLA.O surged more than 20% on better than expected results.

In a conference call with analysts, Hackett said Ford “experienced more headwinds” than expected in the quarter.

“As a result, we will not grow adjusted EBIT this year as we intended,” Hackett said, referring to earnings before interest and taxes.

The disappointing financial results are a setback for Hackett, the former CEO of office furniture maker Steelcase, who took over Ford in May 2017 after the abrupt ouster of Ford veteran Mark Fields.

For two years, Hackett has been asking investors to be patient with a methodical restructuring that has made progress, including a wide-ranging alliance on electric vehicles with Volkswagen AG VOWG_p.DE and the sale of money-losing operations in India to a venture controlled by Indian automaker Mahindra & Mahindra MAHN.NS.

But by Ford’s own reckoning, most of the restructuring work has yet to be done. It has booked only $3.3 billion of the projected $11 billion in charges it previously said it would take for the global restructuring, up from $2.2 billion at the end of the second quarter.

The company also suffered a bumpy introduction of the redesigned Ford Explorer and all-new Lincoln Aviator in the quarter, said Joe Hinrichs, Ford’s president of automotive.

“We were disappointed in the overall performance,” he told analysts, referring to the uneven vehicle launch and production ramp-up at an aging Chicago assembly plant.

“We took on too much,” said Hinrichs, citing the difficulty of launching the Explorer and Aviator simultaneously while it was breaking in a new assembly line at the 95-year-old Chicago plant. “We have plenty of inventory now at dealers,” he added.

The third quarter included $1.5 billion in costs for the company’s global restructuring, $800 million of which was related to the formation of a joint venture in India with Mahindra.

Ford’s ongoing restructuring includes cutting costs and overhauling its product lineup in key global markets like China and Europe.

The No. 2 U.S. automaker still faces the prospect of negotiating a new four-year labor agreement with the United Auto Workers following the union's more than month-long strike against General Motors Co GM.N, which cost GM about $2 billion according to analysts.

Ford reported a third-quarter net profit of $425 million, or 11 cents a share, compared with $991 million, or 25 cents a share, a year earlier.

Excluding one-time charges, Ford earned 34 cents a share, above the 26 cents analysts had expected according to IBES data from Refinitiv.

Revenue in the quarter fell 2% to $37 billion, above the $33.98 billion expected.

Virtually all of Ford's third-quarter pretax profit came from North America - its most lucrative market - where highly profitable pickup trucks drive margins for the Dearborn, Michigan-based automaker and its Detroit rivals, GM and Fiat Chrysler Automobiles NV. FCHA.MI

Ford said Wednesday it now expects a full-year adjusted operating profit in the range of $6.5 billion to $7 billion, compared with $7 billion last year. In July, it had forecast an increase in the range of $7 billion to $7.5 billion.

Ford also said it expects adjusted earnings this year in the range of $1.20 to $1.32 a share. Previously, the high end of its forecast had been $1.35. Analysts expect $1.26 a share.

Ford’s third-quarter operating profit in North America was just over $2 billion. Its U.S. sales in the quarter fell 4.9%, but demand for lucrative pickups remained strong with an increase of almost 9%.

China revenue in the quarter slid about $300 million to $900 million and Ford’s share in that market fell to 2.3% from 2.9% last year.

Ford’s third-quarter sales in China fell 30% as it continued to lose ground in its second-biggest market. Ford has been struggling to revive sales in China since its business began slumping in late 2017.

In September, Moody’s downgraded Ford’s credit rating to junk status - below what it rates larger rival GM - citing Ford’s operating and market challenges, and weak cash generation due to its global restructuring.