J. P. Stevens and Co., Inc. the embattled textile giant, denied at its annual meeting here yesterday that the ongoing textile workers union boycott was hurting company operations and finances, although the company reported lower first quarter profits.

Stevens Chairman James D. Finley said the "incontestible proof of the failure of the boycott lies in the fact that our sales and profits have not been affected by their (the union's) efforts." The Amalgamated clothing and Textile Workers Union has been boycotting Stevens' products nationally for more than a year.

Stevens reported net sales for the first quarter ended January 31 rose to $350.3 million, a $16 million increase from the $334.3 million reported in the same quarter last year, "an all-time record for any first quarter," Finley said.

Profits for the quarter, however, fell 7 percent to $7.1 million (61 cents a share) from the $7.7 million (99 cents) reported in the same quarter last year.

Finley admitted to corporate gadfly Lewis Gilbert during the meeting that only about 2.5 percent of Stevens' sales increase in 1977 was due to the sale of more products. The rest of the increase was the result of higher unit prices, he conceded.

Finley said at a press conference after the meeting that he had decided not to stand for reelection to the board of directors of the New York based Manufactures Hanover Trust Co. Manufacturers Hanover has been under increasing presure from organized labor to rid its board of indivisual directors connected with Stevens. Recently individual unions have withdrawn pension funds managed by the banks trust department. During the meeting, Finley challenged ACTWU to a "turn of card" election to settle the organizational issue at Stevens.

"We discussed with the National Labor Relations Board the idea of having elections in all of our plants to decide once and for all do our employes want a union or not," he said.

%We feel the employes should decide, through the democratic process of secret ballot election, whether they want the union to represent them or not. The company stands firm in its belief that this is the only truly Amercian way to decide this issue and stands ready to abide by the result of our employes' vote.'

The company employs about 45,000 workers in more than 80 miles, including 18 in the Greenville area.

Dissident shareholders proposed seven resolutions to be voted upon during the nearly four-hour-long meeting.

The resolutions, dealing with the company's labor, hiring, health and safety practices were soundly defeated by the shareholders. No resolution won more than 6 percent of the 9.4 million shares of common stock voted.

All 13 directors on the company slate were elected to the board. One nominee from the floor, Addie Jackson, a former Stevens employe from Statesboro, Ga., received 778 votes.

Security for the annual meeting, the first held outside the New York area since 1949, was tight. The approximately 700 shareholders and union members, in attendance were required to show passes for admittance to the cavenous Textile Hall, the site of the annual spring Textile Machinery Exposition here.

Both Stevens and ACTWU spokesmen agreed that while rancorous, the meeting was not disorderly.

"The meeting is going well," said one Stevens executive about halfway through. "The union people have got a lot of room to move around in now. They're not crowding each other, and we turned the hot air blowers off about 9 a.m., so nobody is getting too hot under the collar. It's the way it should be."

Union spokesman John Bolt Culbertson, a Greenville attorney, said the meeting "certainly didn't provide any fireworks, but it was planned that way. The union can be very discreet."

The meeting was nevertheless marked by occasional sharp debate between union sympathizers and the chair, manned for almost the entire session by Finley.

Speakers supporting the various resolutions included union officials, Catholic priests and nuns and present and former Stevens employes.

One former Stevens mill hand from the Statesboro, Ga., plant was called back to the microphone to state his name following his impassioned out-burst in which he compared Stevens' policies to those of Adolph Hitler.

"My name is Estes B. Risse," the man fairly boomed into the mike. "That spells R-I-S-S-E, and I'm gonna be until the day I die or until the day J.P. Stevens company is organized."

Stevens was not without its defenders. One woman rose to question the emphasis union sympathizers were putting on Stevens clean-up operations for the afternoon tour scheduled for the Greenville mill. She told the crowd she was a 48-year veteran of Stevens' Anderson, S.C., mill.

"I have lived a good life and managed to put a son through college on my Stevens' wage," she said. "As far as cleaning up goes, I don't know of any wife or mother who doesn't clean up her house when she knows she's going to have company."

Through it alll, Finley remained imperturable. He fielded questions and criticism on a wide range of subjects.