Shares of AllianceBernstein Tumble

The investment management company earnings estimates were revised lower because of worse-than-expected hedge performance fees and larger-than-expected loses on investment writedowns.

AllianceBernstein shares fell $6.89, or 8.9 percent, to $70.12. Earlier in the session, shares hit a 52-week low of $66.11.

In October, AllianceBernstein predicted 2007 earnings would range between $4.50 and $4.80 per unit. Analysts polled by Thomson Financial, on average, forecast earnings of $4.63 per unit.

On the news of AllianceBernstein cutting earnings estimates, Buckingham Research Group analyst William Katz cut his rating on the company to "Neutral" from "Accumulate."

The lowered earnings estimate is also a sign organic growth will continue to slow through 2008, Katz wrote in a research note.

"While AllianceBernstein has a solid longer-term track record, we suspect the investment performance in the past six months has been particularly onerous, which likely will erode flow prospects," Katz wrote in the note. Katz cut his 2008 earnings estimate for the company to $5.08 per unit from $5.44.

AllianceBernstein is scheduled to report full-year financial results on Jan. 23.