AllianceBernstein ( AB) beat expectations for third-quarter earnings, which rose 38% despite a turbulent market. But the New York money manager's shares fell after it reduced its forecasts for full-year earnings.

The stock was down $4.94, or 5.6%, in early trading at $83.23.

Diluted net income rose to $106 million for the quarter ended Sept. 30, compared with $75.2 million in the same period a year earlier. Diluted earnings per share increased to $1.20 per share, compared with 87 cents a share in the year-ago period.

The results exceeded expectations for diluted EPS of $1.14 per share, according to analysts polled by Thomson Financial.

AllianceBernstein CEO Lewis Sanders said the company struggled during the third quarter in the face of a turbulent market, which hurt the performance of its value stock and fixed-income products. The performance of its hedge funds was also "disappointing," he said.

The company ended the third quarter with almost $812.8 billion in assets under management, up $19.8 billion over the second quarter, but virtually all of the increase, or $19.44 billion, was attributable to market appreciation. Investors added a scant $400 million of net new money during the quarter. Private clients pumped in $2.4 billion, but this was largely offset by $2.1 billion in net redemptions by institutional investors.

Sanders also announced that the company had reduced estimates of full-year earnings to between $4.50 and $4.80 per share, down from between $4.90 to $5.25 a share previously. He attributed the reduction to "substantially lower" performance fees on hedge fund services than the company saw last year.

Elsewhere in the industry, Ameriprise ( AMP) late Wednesday announced a 17% increase in third-quarter earnings on strong growth of its fee-based businesses.

Net income rose 14% to $198 million from $174 million for the same period in 2006. Net income per diluted share was 83 cents per share, up 17% from the year-ago period. Adjusted earnings per diluted share rose 5% to 99 cents a share.

The results met the expectations of analysts surveyed by Thomson Financial.

Ameriprise's assets under management increased rose 12% over the year to $492 billion.

Third-quarter consolidated revenue increased 11% to $2.2 billion compared with the same period a year ago, because of growth in management and distribution fees and increased net investment income, mainly due to variable annuity-related hedges.