International Business Machines Corp. chairman Frank T. Cary today tried to reassure the company's shareholders tht the highly profitable computer manufacturer still has plenty of room to grow despite the disappointly small, 4 per cnet profit increase in the first quarter that sent its stock price tumbling 12 points in 2 days last week.

One woman shareholder at the company's annual meeting said she was wearing black because she was "in mourning for the recent price of our stock which I hope your remarks will correct."

Whether or not it was because of Cary's remarks, IBM shares stabilized today despite the market's overall steep decline, rising 50 cents to $258.25. It had been trading at about $272 a week ago.

In his statement, Cary called the U.S. Justice Department's mammoth antitrust suit against the company "an anachronism." And he said that the recent dismissal of California Computer Industries $300 million civil antitrust suit against IBM was "a very significant victory" because it is "a capsule version of the Justice Department case."

Meanwhile, there was a standoff between the IBM chairman and shareholders representing church groups who have been seeking a commitment from IBM not to sell its computers to foreign regimes that allegedly use them to further repressionist policies directed at their citizens.

"We do not and cannot control the actions of our customers, and it would be grossly misleading to espouse a policy we cannot enforce," he told more than 6,000 shareholders attending the meeting, the first held in New York City in 10 years.

At the same time, Cary said that company investigations of charges brough to IBM by the church groups, primarily centering on computer installations in Chile, "have found no instances" in which they were used to abridge human rights."

As for the company's prospects, Cary gave no hint on earnings expectations for the rest of the year.But referring to the $5 billion remaining in IBM's cash kitty after its recent tender offer for its own stock, he said the company is going to use most of it to expand.

The IBM chairman said he did not agree with recent analyses that technological advances in the semi-conductor area that have made cheap small-sized computers widely available will make some of IBM's products obsolete and blunt its long-term growth.

Cary said the company's director continue to look at the question of whether to split the stock, but said that he hasn't been personally convinced that a very low price of the stock would be advantageous in any way."