* FTSEurofirst 300 down 0.5 pct, Euro STOXX 50 down 0.7 pct
* Results from ARM, Ericsson cast shadow on tech earnings
* Primark gives Associated British Foods a lift
(Updates prices, adds quote, detail)
By Francesco Canepa
LONDON, April 23 European shares snapped a
three-day winning streak on Wednesday, with tech stocks hit by
disappointing results from Ericsson and chip designer ARM
Holdings, casting fresh shadows on the sector's earnings
Shares in telecoms equipment maker Ericsson
slumped 6 percent, wiping the most points off the FTSEurofirst
300, after the Swedish firm missed with its
first-quarter sales and profit forecasts, blaming weak revenues
from North America.
ARM Holdings, whose chip technology powers Apple's
iPhone, fell 2.8 percent after seeing lacklustre
royalty revenue growth in the first quarter.
While both companies expected improvement in the remainder
of the year, their weak results contributed to a disappointing
first-quarter earnings season for the tech sector so far.
All tech companies in the STOXX Europe 600 index
which have reported through April 22 missed revenue estimates,
StarMine data showed.
The STOXX Europe 600 tech index was down 1.3 percent
"The market has quickly adjusted and understood that for
European companies the Q1 reporting season will not be a
particularly strong one," Bernd Laux, an analyst at Kepler
"I have relatively strong confidence in this forecast of
improvement but admittedly the risk is increasing due to the
dependence on the Christmas business."
Overall, earnings news was mixed, continuing a theme of the
season so far where 53 percent of STOXX Europe 600
companies that have reported results have beaten or met
The top riser was Associated British Foods, which
surged 9.2 percent after it met forecasts, gave a bullish
outlook for full-year profits and got a boost from its Primark
Valuations on the STOXX 600 are at their highest since 2005
following a rally since mid-2012, and investors are looking for
profits to rebound to support elevated prices.
"Earnings has to be the major driver. Generally the market
is quite wary of this reliance on earnings growth this year, and
it could be quite volatile until the second half of the year,"
said Veronika Pechlaner, who helps manage $13 billion of assets
at Ashburton Investments.
The pan-European FTSEurofirst 300 was down 0.5 percent at
1,339.28 points at the provisional close, after surging 1.3
percent on Tuesday. The Euro STOXX 50 was down 0.7
percent at 3,178.99 points.
The indexes extended losses in the afternoon after data
showed new U.S. home sales tumbled more than expected in March,
to an eight-month low, while the U.S. manufacturing sector
expanded at a slightly slower-than-expected pace in April.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up
(Additional reporting by Alistair Smout; Editing by Susan