Despite a record loss of $67 million in the first quarter, Chessie System Inc. posted overall earnings of $70.5 million ($3.59 a share) in 1978.

Hays T. Watkins, chairman and president of the rail holding company that is seeking to merge with Seaboard Coast Line Industries Inc., said Chessie earned substantially more the last nine months of 1978 than it had earned in any previous full year.

In 1977, Chessie earned $87 million ($4.51 a share).

Chessie posted a first-period loss of $3.42 a share as a result of a 110-day coal miners' tstrike, but had per-share earnings in the next three quarters of $7.01, Watkins said.

"Even though Chessie's performance in those nine months reflected a catching up after the strike, 1978 could well have been a record year for Chessie but for the first-quarter loss," Watkins said.

In the fourth quarter, Chessie $54.8 million ($2.79), its best final quarter in history.

Operating revenue for the year totaled $1.6 billion compared with $1.5 billion in 1977. Watkins said Chessie expects an increase in its coal traffic and merchandise freight movements that, coupled with cost control programs, could bring record profits during 1979.

The earnings numbers were contained in Chessie's annual preliminary report to shareholders, traditionally issued on the first working day of the new year. The report also contained a pitch to shareholders on the benefits that could accrue with Chessie's proposed merger with Seaboard Coast Lines.

The Chessie System now includes the Baltimore & Ohio, Chesapeak & Ohio and Western Maryland lines. Seaboard owns the Seaboard Coast Line Railroad and the Louisville & Nashville Railroad among others. Seaboard's rail lines stretch from Florida to Lake Michigan, from the Midwest to the Atlantic Seaboard. The merger, which would create the largest rail line in the United States, is subject to the approval of stockholders of both -- simultaneous meetings are sheduled for Feb. 13 -- as well as the Interstate Commerce Commission.