Government Employees Life Insurance Co. (Gelico) yesterday reported a modest increase in third-quarter profits E.C. Ernst, Inc., meantime , posted higher earnings and directors increased the company's quarterly dividend rate.

Earnings of Gelico totaled $2.03 million (45 cents a share) in the recent quarter compared with $1.92 million (43 cents) in the same period last year. Included in the recent quarter were capital losses of $21,791, which reduced operating profits of $2.05 million by one cent per share.

For the first nine months of 1977, Gelico reported profits before capital gains of $5.77 million ($1.29 a share) compared with $5.41 million ($1.21) last year.

After capital gains, Gelico's nine month profits were $5.79 million ($1.29) vs. $5.48 million ($1.22).

E.C. Ernst, Inc., a Washington electrical construction and contracting firm, reported a 16 per cent increase in profits for the six months ended Sept. 30 and directors voted a higher dividend.

Earnings rose to $1.8 million (96 cents a share) compared with $1.57 million (89 cents) for the six-month period last year, although contract revenues declined slightly to $63.8 million from $64.2 million.

In the recent quarter, Ernst earned $950,000 compared with $919,000, or 50 cents a share in both periods. Contract volume rose to $35.3 million from $34.7 million.

Chairman Edward P. Johnson said international operations were responsible for recent gains with domestic results affected by a slow recovery in constrection spending. The firm's blacklog of contracts on Sept. 30 rose 51 per cent from a year ago to $141 million.

Ernst's cash dividend was increased to 15 cents a share from 12 cents, beginning with a payout on Nov. 30 to owners of record Nov. 23.