European shares flatline on mixed earnings, US jobs data

* FTSEurofirst 300 flat at 1,281.63

* Delayed U.S. nonfarm payrolls due at 1230 GMT

* Earnings remain key after market rerating

* Lufthansa (Xetra: 823212 - news) leads airlines lower as outlook disappoints

* Royalty worries weigh on ARM Holdings (LSE: ARM.L - news)

* Gjensidige beats forecast, announces special dividend

By David Brett

LONDON, Oct (KOSDAQ: 039200.KQ - news) 22 (Reuters) - Mixed results on a big day for corporate earnings halted European equity markets near five-year highs on Tuesday, as investors awaited delayed U.S. jobs data.

Concerns are mounting over earnings which have so far failed to keep up with recent rerating of equity indexes.

By 1000 GMT, the FTSEurofirst 300 was unchanged at 1,281.63. The broader STOXX 600 also was unchanged at 319.48, after eight straight days of gains.

Due at 1230 GMT, U.S. non-farm payrolls are expected to have increased by 180,000 in September, a step up from August's gain of 169,000, according to a Reuters poll.

The numbers, held up by the U.S. government shutdown, are now out of date and traders said it was unclear how much of an impact the figures would have on equity markets.

"Because of what has happened to equity markets in the interim and the fact that ... we have had a government shutdown since the figures were first due for release, we are in a completely different environment," Toby Morris, Senior Sales Trader at CMC markets said.

"No one really knows what to take from it. To our clients the most important thing is the wind down of stimulus in the U.S. and we are unlikely to get much clarity on that from the numbers today."

Equities have rallied since last week's debt deal in Washington as well as on expectations that, because the U.S. debt crisis has not been resolved, the Federal Reserve will wait longer before scaling back its stimulus programme.

The Stoxx 600 now trades a forward 12-month price-to-earnings of 13.29 times against an 10-year average of 12 times, according to Datastream.

"There has been a massive risk de-rating - certainly in Europe over the past year - which has been taken lower with the agreement in the United States. Even so, we are getting concerned with valuations and that earnings are not kicking through," Chris Parkinson, head of equity strategy at Christopher Street Capital, said.

Germany's Lufthansa fell 2.3 percent after it issued a disappointing profit forecast for 2013, dragging down peers IAG and easyJet.

Chip designer ARM Holdings, whose technology is used in Apple (NasdaqGS: AAPL - news) 's mobiles, fell 4.5 percent despite licensing demand delivering a third-quarter beat as concerns lingered over royalty weakness, according to analysts.

An overshoot in recovery expectations prompted UBS to double-downgrade ArcelorMittal (Other OTC: AMSYF - news) to "sell" from "buy". The steelmaker slipped 2.3 percent.

Of the 18 companies in the STOXX 600 that have so far reported third quarter earnings, 61 percent have beaten analyst expectations.

But overall, earnings of companies in the index are expected to decline 1.4 percent this quarter, compared with an average 9.7 percent gain a year ago.

However, Norwegian insurer Gjensidige rallied 7.1 percent after announcing third quarter earnings that beat forecasts and a surprise special dividend, while Swedbank , Sweden's second largest bank by value, climbed 4.6 percent after operating profit beat forecasts.

UK consumer goods firm Reckitt Benckiser Group rose 4.6 percent after reporting higher revenues and saying it was reviewing options for its pharmaceuticals unit.