NEW YORK -- Earnings of QVC Inc. without Paramount Communications are expected to grow 18 percent a year at least through 1998, according to a research report by UBS Securities.

The report, by analyst Peter J. Siris, who has been following the company closely, says recent earnings have been distorted by special items and that the core earnings have been and will continue to be strong.

In 1993, earnings were down 13.4 percent at $1.10 a share because of write-offs of 38 cents a share reflecting costs of the unsuccessful bid for Paramount and 15 cents a share from expenses related to start-up costs in international joint ventures with B Sky B in Europe and Grupo Televisa in Mexico.

The report notes that QVC agreed to absorb all losses until those businesses became profitable. Once they reach profitability, QVC keeps all the profits until it makes up for all the losses absorbed.

QVC's joint venture with B Sky B, a European shopping channel, was launched Oct. 1, 1993, reaching 1.8 million satellite homes and 500,000 cable homes. Siris expects the international businesses to turn a profit by 1996 and then grow rapidly. He expects a profit of $3 million in 1996 to grow to $22 million in 1998.

The report says the results of Q2 and On Q, which are replacements for the current Fashion Channel, are difficult to analyze. Overhead and production costs will be high. "The people running Q2 and On Q may be able to create giant hits, the volume of which could eclipse QVC within three years," the report says. "On the other hand, this team could produce expensive shows that never cover overhead. Our best guess is that the results should be somewhere between a smash and a flop, but it is almost impossible to adequately judge exactly where at this time."

Nevertheless, Siris expects these businesses to be strong contributors to profits going forward. He noted that the response of cable operators to Q2 has been better than expected with 32 million households on systems that will get the new service.

"This carriage should give QVC much higher than expected sales, a quicker break-even and potentially much higher profits for Q2 and On Q."

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