Government Employees Insurance Co. continues to report increased profitability but sluggish sales volume.

The Washington automobile insurance firm, which has been attempting to expand its non-auto lines of business, reported yesterday that third-quarter profits jumped to $20 million (56 cents a share) compared with $18.5 million (54 cents) in the same period last year.

Geico's results for the recent quarter brought nine-month earnings to $61.5 million ($1.74 a share) compared with $41.9 million ($1.22) in the comparable 1977 period, with all per-share figures diluted to reflect results if convertible preferred shares were converted into common stock.

But the company's written premium and service charge volume has continued to decline, despite a marketing campaign designed to attract new business.

In the recent quarter, the premium volume was $131.8 million compared with $134 million a year earlier; for the nine-month period, premiums and service charges declined to $406.3 million from $425.9 million.

Geico avoided bankruptcy in 1976 and since has experienced a strong rebound in profits as well as its overall financial condition. However, among the steps taken to begin recovery were a deliberate reduction in customers and price increases. The firm has found it difficult to resume strong premium volume growth, and has been reducing some rates.

Geico's results announced yesterday are preliminary and unaudited and they include net income derived from ownership of three affiliates - Criterion, Government Employees Life and Government Employees Financial.

The nine-month results include benefits from utilicing tax loss carryforwards of $24.7 million and $13.8 million, respectively, in 1978 and 1977. For the third quarter, such benefits were $7.9 million this year and $6.8 million a year ago.

Noland Co., a Newport News building trade equipment wholesaler, listed third-quarter profits of $1.15 million (47 cents a share), a 5 percent decline from $1.2 million (49 cents) in the same period last year. Sales were up 5 percent to $69 million.

A. H. Robins CO., a Richmond pharmaceutical manufacturer, reported a 27 percent gain in profits for the third quarter to $8 million (30 cents a share) compared with $6.3 million (24 cents) last year. Sales were up 15 percent to $85 million.

Universal Leaf Tobacco, of Richmond, reported earnings of $5.3 million (58 cents a share) in its first fiscal quarter ended Sept. 30, down from $6.2 million (67 cents) last year. Sales rose to $223 million from $218 million.

Black & Decker Manufacturing Co., a tool manufacturer in Towson, Md., posted record sales and profits for the year ended Sept. 24. Earnings totaled $66.2 million ($1.58 a share), up 28 percent from $51.7 million ($1.24) as sales increased 18 percent to $960 million. Directors voted to increase the quarter cash dividend from 15 to 17 cents a share, starting Dec. 26 to owners of record Dec. 12.