Sector movers: ARM drags tech stocks lower after royalty miss

A negative reaction to results from ARM Holdings dragged the technology sector lower on Tuesday as weak royalty revenue growth once again disappointed investors.The chip designer beat headline forecasts with fourth-quarter revenue rising 15.3% year-on-year to $302.9m, compared with the consensus estimate of $293.5m. However, this was mainly due to better-than-expected Processor Division (PD) licensing revenue which rose 26% to $107m (consensus: ($94.7m), while PD royalties were up just 7.1% at $130.4m (consensus: $137.9m).The company said that growth in royalties was limited by slower sales of chips for high-end smartphones. "We are likely to remain cautious on FY14E royalties when the main engine of recent growth is clearly sputtering," said Numis Analyst Nick James, who reiterated his 'reduce' rating on the stock.The stock was 8% lower at 855.5p in afternoon trade.Others in the sector include Filtronic, Imagination Technologies and Wolfson Microelectronics were also trading in the red, with the latter lower ahead of its own full-year results due out tomorrow.Meanwhile, the mobile telecoms sector was also unwanted today with heavyweight constituent Vodafone lower after comments from Credit Suisse.The bank said that the chance of AT&T making a bid for the UK telecoms firm is "slipping" and a takeover is becoming an "increasingly risky move" for the US company.It now assumes a one-in-three probability that the company will make an offer, down from 50/50 previously.Elsewhere, the share price of Mobile Streams sank after Chief Financial Officer Gaston Cerf resigned with immediate effect.Top performing sectors so far todayLife Insurance 6,663.81 +2.16%Personal Goods 23,590.80 +1.60%Financial Services 7,458.33 +1.27%Chemicals 10,728.35 +1.16%Forestry & Paper 9,985.05 +1.09%Bottom performing sectors so far todayTechnology Hardware & Equipment 1,038.67 -7.10%Industrial Metals & Mining 1,037.31 -3.44%Mobile Telecommunications 5,105.59 -1.15%Beverages 12,889.45 -0.86%Food & Drug Retailers 4,191.06 -0.79%BC