Ford on Wednesday reported lower quarterly profits and slashed its full-year forecast, citing increased incentive spending in North America and lower sales in China.

Earnings in the third quarter came in at $425 million, down 57.1 percent from the year-ago period.

Revenues fell 1.8 percent to $37 billion.

The company is midway through a major "redesign" that has involved phasing out low-selling sedans in the United States, cutting thousands of jobs in Europe and shifting to an "asset light" business model that involved ending production at a Brazil factory.

Moody's downgraded Ford's credit rating last month to "junk" status, citing the company's weak financial outlook as it embarks on an ambitious restructuring.

But Ford Chief Executive Jim Hackett touted the measures, saying "we are getting stronger today and we have more work to do."

Shares fell 2.6 percent to $8.97 in after-hours trading.