Chessie System, Inc, Chairman Hays T. Watkins yesterday came up with no better a wordsmith than Charles Dickens to describe the giant railroad company's decline in profits during the year just ended.

"Nothing explains 1977 for Chessie better than the words . . . 'it was the best of times, it was the worst of times,'" said Watkins, reporting that earnings fell to $87 million ($4.51 a share) in 1177 compared with the record $102 million ($5.38) of 1976.

Although profits declined in 1977, Watkins noted that it still was the fourth-best year in the company's history. In addition, revenues edged up to $1.5 billion from $1.4 billion and fourth-quarter profits alone were ahead of the 1976 pace, mainly because of non-rail operations.

Chessie, which owns the chesapeake & Ohio, Baltimore & Ohio and Western Maryland railroads, thus became the first major American corporation to report earnings and sales for calendar year 1977.

Watkins said the level of profitability that was achieved came despite cold winter weather a year ago, strikes, inflation and the general state of the economy.

After the record cold wave, Chessie reported a loss in the first quarter of the year. Earnings added up to a record in the second quarter, however, before wildcat coal mine strikes in the summer cut coal shipments in half.

Now, Chessie is suffering from a full coal strike that has cut off its busy coal hauling and, along with other railroads, faces an uncertain year with its own labor contracts expired and a strike considered possible.

Watkins said yesterday, however, he expects 1978 to be a better year for Chessie, as the general economy improves. He said Chessie last year spent $500 million on maintaining and improving rail cars, locomotives and roadway. The 6,000th mile of copntinuous welded rail was installed on July 11 - the first U.S. railroad to pass that mark.

Neotec Corpj., of Silver Spring, a manufacturer of quality control devices, yesterday reported a oss of $339.515 in the nine months ended Oct. 30 compared with pretax forfits the previous year of $429.104. Sales dipped to $3.3 million from $4.1 million.

The company said a poor third quarter reflected lower sales than anticipated for a grain quality measurement device, caused by low grain prices that reduced agricultural spending. Neotec also said it received a $1.16 million Agriculture Department contract for delivery in the current fiscal year. Coupled with other sales, the USDA award should make the fourth quarter profitable, Neotec states.