International Telephone & Telegraph Corp. yesterday reported record sales and the second-highest yearly profits in its 56-year history during 1976.

Chairman Harold S. Geneen said unaudited results showed profits of $489 million ($3.95), up 23 per cent from $398 million ($3.20) in 1975, not counting extraordinary items. Sales totaled $11.7 billion compared with $11.4 billion in the previous year.

In the fourth quarter alone, Geneen said, the nation's 11th largest industrial corporation had a "particularly encouraging" performance. No specific figures for the quarter were published but Geneen said it amounted to "strong proof" that the nation is firmly set on a new cycle of economic recovery.

ITT set aside reserves from its 1976 operations for problems in Portugal and Rhodesia and its investments in those nations, Geneen stated. A reserve of $15 million also is planned for the estimated cost of the settlement proposal on litigation of ITT's acquisition of Hartford Fire Insurance Co.

Overall, these reserves are expected to total $79 million, equal to a fourth-quarter charge against profits of 64 cents a share. In the second quarter, ITT had an extraordinary credit of $85 million (69 cents a share) on the sale of a French subsidiary.

Holding companies for the nation's fifth and sixth largest commercial banks yesterday reported higher profits for the fourth quarter of 1976 but mixed results for the full year.

Chemical New York Corp. said operating earnings for the final quarter were $27 million ($1.86 a share) compared with $22.4 million ($1.55) a year ago. For the year, net income was $92.4 million ($6.40) vs. $95.9 million ($6.94). The firm, owner of fifth-ranked Chemical Bank, said loan loss reserves were reduced to $128 million for 1976 compared with $141 million the previous year.

J.P. Morgan & Co., parent of Mogan Guarantly Trust Co., reported fourth-quarter operating profits of $62.7 million ($1.54 a share) compared with $49.9 million ($1.29) a year ago. For the year, net income was $202.7 million ($5.04) vs. $183.8 million ($4.76). The fourth-period profits included 14 cents a share from sales of Morgan's interests in an Italian bank.