LONDON -- Ericsson did it again.

Not content with causing an industry-wide slump at the end of last month with negative comments, Ericsson this morning reported stunning first-half pretax profits of 18.6 billion kronor (

2.07 billion), up from 4.3 billion kronor (

317 million) last time, but then spoiled it all by complaining of a worrying components shortfall.

Ericsson shares shed 15.00 kronor to 187.00. This in turn dragged down other telecom stocks such as French equipment maker

Alcatel

(ALA)

, down 1.30 euros to 77.30 ($72.11), and Vodafone AirTouch, down 7p to 300 ($4.56).

The result was that by midmorning the

CAC 40

in Paris was down 33.3 to 6530.4 and the

Xetra Dax

in Frankfurt fell 36.0 to 7444.2. The

Neuer Markt's

tech-heavy

Nemax 50

index was 13.4 lower to 6403.7.

In London, the

FTSE 100

was down 37.8 points to 6431.2 at midmorning, although the

Techmark

was not doing too badly and was up 12.8 points to 3757.2.

The big news in London this morning was the decision by

United News & Media

(UNEWY)

and

Carlton Communications

(CCTVY)

not to take a trip up the merger aisle because of the government's decision to impose a disposal of the Meridian TV franchise as a condition of the deal. This leaves the door open for

Granada Media

to take a shot at merging with United, although there may be other potential bidders. United added 16p to 960, but Carlton slipped 8p to 812 and Granada Media was down 23p at 585.

Deutsche Telekom

(DT) - Get Report

continued to drag on the Dax, as investors fretted that DT was on the verge of paying far too much for U.S. wireless operator

VoiceStream

(VSTR)

. Midmorning DT was down 1.07 euros to 56.10.

Elsewhere in European telcos,

France Telecom

(FTE)

fell 0.30 euro to 147.20 and

Telefonica

(TEF) - Get Report

dipped 0.07 euro to 24.83.

In Frankfurt, software maker

SAP

(SAP) - Get Report

was down 6.40 euros to 243.11, paring gains made Thursday after better-than-expected second-quarter results.