With the departure of a key executive, a delay in a potentially lucrative legal ruling and disappointing guidance to Wall Street, the outlook for Gemstar-TV Guide International took a decided turn for the worse last week.

Gemstar, a once high-flying intellectual-property and media company that is seeking to become the dominant provider of electronic programming guides, announced the abrupt resignation ? effective April 1 ? of co-president and co-COO Peter Boylan. The company would not make any comment beyond the requisite ?leaving to pursue other opportunities?; Boylan could not be reached for comment.

The company also announced in its earnings conference call late last Monday a ?worst-case scenario? for revenue growth this year, stemming from a shift in the revenue mix of Gemstar's technology and licensing segment and sluggish growth in its interactive programming guide (IPG) segment. The guidance was lower than analysts expected and prompted a slew of downgrades, estimate reductions and target stock-price cuts by analysts Tuesday morning.

Further magnifying Gemstar's worries was the announcement Tuesday that an International Trade Commission judge would delay by three months his initial decision in the patent-infringement complaint Gemstar filed against four companies. The decision was expected March 21 and is now expected by June 21, with a final determination expected in September.

The confluence of factors helped drive down Gemstar's stock to a three-year low Tuesday, followed by more losses Wednesday. Near Wednesday's close, Gemstar traded at $15.58, down 46 cents, or 3%. That followed Tuesday's plunge of $5.69, or 26%.

Boylan, described by CIBC World Markets executive director of equity research John Corcoran as ?shrewd, talented and an exceptional negotiator,? was known throughout the cable industry for taking a tough stance in negotiations with operators. While some observers say Gemstar's chairman and CEO, Henry Yuen, was the driving force behind the company's proclivity to threaten to sue any company that infringed on its growing stable of patents, it was Boylan who was the public face of those threats.

His legacy will be the long-term licensing deals he sealed with operators such as Charter Communications, Comcast Corp. and Adelphia Communications, but he leaves the company with some unfinished business, namely licensing deals with Cablevision Systems, Cox Communications and satellite service providers DirecTV and EchoStar Communications. Boylan won't be replaced, but Gemstar named Mark Allen, who worked closely with him, to the post of EVP-technology licensing.

?Pete has accomplished most of his objectives,? said Yuen, on the company's conference call. ?He was instrumental? in the many MSO deals Gemstar has signed over the past 15 months, he added, and ?we pledge to build on this foundation.?

In the case before the ITC, Gemstar had claimed that EchoStar, Scientific-Atlanta, Pioneer Corp. and SCI Systems were bringing set-tops into the United States with IPGs that infringed on several Gemstar patents. By bringing the case before the ITC, Gemstar was hoping for a speedy resolution. The delay in the ruling hurt the company in several ways.

For one thing, it eases the pressure on the companies that were waiting for the outcome of the patent case to quickly sign a licensing deal with Gemstar.

?There may be some large carriers on the sidelines who may be waiting to see what the [ITC] says before they strike a deal,? CIBC's Corcoran says.

One industry expert who asked to remain anonymous says that if the ITC rules against Gemstar in June, the company will lose its biggest intimidation factor.

?Henry Yuen and Peter Boylan have kept operators in line with threats of suits for years,? the source says. ?If they can't threaten that anymore, then the operators won't feel compelled to do deals with Gemstar like they have in the past.?

Analysts expect continued volatility in the stock until the patent case is resolved. Several analysts who follow the stock expected the ITC to rule in Gemstar's favor, with that ruling to become a catalyst for the stock. That catalyst has now been eliminated ? at least in the short term. At this point, investors aren't counting on strong revenue growth either.

That means pressure will grow on Gemstar to sign more licensing deals. This year the company will see a shift in its revenue mix in its technology and licensing segment, with a sharp drop of 50% in revenue from one-time fees. Instead, due to the many long-term licensing deals it signed last year, it will see more revenue from monthly recurring fees paid by operators. Ultimately the licensing deals may prove to be more profitable, but the short-term impact is a loss of revenue that will hit the company this year.

The delay also pushes back the possibility that Gemstar would soon receive what Yuen referred to on the company's conference call as ?catch-up payments,? or settlements from the parties in the suit.

For 2002, Gemstar expects two of the company's high-growth divisions, accounting for just under a third of its revenue and almost half of its cash flow, to post results far below last year. Gemstar expects a revenue decline of 10% to 15% in its technology and licensing segment, which last year posted revenue growth of 30%. Growth is expected to slow dramatically in the interactive platform segment ? Gemstar expects 54% growth this year after a jump of 338% last year. Revenue growth in this segment is affected by seasonal factors, but the slowdown also reflects advertisers' unwillingness to adopt a new medium in a slow economy.

Gemstar posted a fourth-quarter net loss of $210.2 million, or 51 cents a share, on revenue of $346.4 million. That compares with a net loss of $126.2 million, or 31 cents a share, on revenue of $358 million in the year-ago quarter.

K.C. Neel contributed to this report.

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