The stock dropped about 40% this morning following the digital entertainment company’s warning last night that revenues would come in far lower, and losses would be much higher, than investors envisioned for this year. The company is “misfiring on all cylinders,” Cowen and Co analyst Robert Stone says this morning as he downgraded Rovi to “neutral” and cut his revenue estimate for 2012 by 13.3% to $670M. Rovi makes most of its money by selling interactive TV software — including program guides and copy protection mechanisms — to consumer electronics and pay TV companies. But it said last night that it’s been hurt by delays in adding or renewing patent licenses, including for TV Everywhere initiatives. Rovi declined to sign deals because “some expected licensees would not agree to acceptable terms,” CEO Tom Carson said. He added that when deals are made — possibly next year — “we expect these deals will include catch-up payments.” The company also said it’s been hit by “softness in the global consumer electronics and interactive TV markets.” As a result, Rovi said it expects to report Q2 revenue of $158M, down 12% from the period last year. Losses per share from continuing operations also could triple to 18 cents.