Shell Oil Co. yesterday reported sharply higher 1976 earnings despite a fairly modest fourth-quarter advance.

The company said its board approved a 2 for 1 stock split and an increase in the quarterly common stock dividend to 80 cents a share from 75 cents.

The stock split is subject to the approval of the shareholders who will vote on the proposal at the April 28 annual meeting! The dividend increase will be paid on Feb. 15 to shareholders of record Feb. 7.

About 70 per cent of the company's 70 million shares are owned by the Royal Dutch-Shell Group of the Netherlands.

The nation's seventh largest oil company said its annual earnings rose 37 per cent to $706 million, or $10.11 a share, from $515 million, or $7.59 a share, in 1975.

Revenues for 1976 were $9.3 billion against $8.2 billion a year before.

However, in a fourth quarter Shell's earnings advanced 5 per cent to $140 million, or $1.97 a share, from $133 million, or $1.93 a share, in the comparable year-earlier quarter. Revences climbed to $2.4 billion from $2.2 billion.

Shell said it spent $763 million in 1976 on exploration and development to slow the decline in oil and natural gas production it has experienced over the last several years.

Shell's oil production last year amounted to 535.000 barrels a day, 20,000 barrels a day fewer than 1975 when the company's oil production fell 31,000 barrel a day from 1974.

"It also appears that Shell's five-year-old natural gas production decline has been arrested. We produced 1.9 billion net cubic feet a day of natural gas in 1976, about the same as last year," the company said.

Most of the company's exploration activity has been in the Gulf of Mexico and areas off the shores of California and Alaska. However, the company also acquired oil leases off the coast of New Jersey last year.

McDonnell Douglas Corp., the aerospace firm, has reported net earnings of $108.85 million, or $2.85 per share, for the year ending Dec. 31, 1976.

The results compare with 1975 earnings of $85.65 million, or $2.27 per share, chairman James S. McDonnell said. Sales in 1976 were $3.54 billion, compared with $3.25 billion.

McDonnell Douglas listed an order backlog of $2.99 billion on Dec. 31, compared to $2.95 billion at the end of 1975. The backlog was made up of 22 per cent commercial and 78 per cent government business, excluding orders not yet funded to the corporation, the company said.

In addition to DC10 and DC9 commercial aircraft, McDonnell Douglas is currently developing and building f4, f15, and f18 military aircraft under government contracts.

Sales in 1976 were broken down in the year-end report as 32 per cent commercial and 68 per cent government business.

Owens Illinois Inc., says its earnings in 1976 exceeded $100 million for the first time.

Board chairman Edwin D. Dodd said earnings, before extraordinary items totaled $106.7 million, a 22 per cent increase over the $87.3 million in 1975.

This was equivalent to $6.83 per common share, up 13 per cent from $6.02 the previous year.

Sales werre $2.57 billion, a 13 per cent increase from sales of $2.27 billion in 1975.

Extraordinary items in 1976 included gains from the first half sale of Owens Corning Fiberglas Corp. common stock and fourth quarter exchange of OCF shares for Owens Illinois shares. Adjustment of deferred taxes relating to a 1970 loss provision resulted in a charge against 1976 earnings.

Dodd said the net impact of these items added $71.6 million, or $4.75 per share to earnings, bringing net earnings for the year to $178.3 million, or $11.58 a share.

Armco Steel Corp., reported a 6 per cent gain in earnings for 1976 to $123.72 million, or $3.93 a share, from $116.66 million, or $3.71 a share, in 1975.

Sales grew to $3.145 billion from $3.046 billion.

In the fourth quarter, Armco earned $24.42 million, or 76 cents a share on sales of $758.31 million, compared with $19.64 million, or 60 cents a share, a year earlier on sales of $704.94 million.

The company's results thus ran contrary to the trend in most of the steel industry.

Chairman William Verity said a stronger-demand for flat rolled products, particularly by the autombile industry, was the main factor in the improvement. But this was offset to some degree by losses on foreign exchange and a weaker demand for tubular products and other oil and gas drilling products.

The steel group had earnings of $51.1 million, up from $12.22 million in 1975, but Armco enterprises profit dropped to $72.57 million from $104.43 million. The steel group profit was enhanced 30 cents a share in 1976 by a change in depreciation accounting and 15 cents a share by a new method of inventory accounting for the foreign subsidiaries.