L. Stanley Crane, chairman and chief executive officer of Southern Railway, predicted today that 1980 earnings for the Washington-based railroad could match the record earnings of 1979 despite the current economic slump.

"In my opinion, barring a much steeper recession than we now foresee and given Southern's strong physical plant and financial condition, we have a good chance of matching last year's record results," Crane told stockholders here at the company's 87th annual meeting.

Last year, Southern reported profits of $160.6 million, up 26 percent from 1978. Its strong earnings growth continued into the first quarter of this year, when it reported record earnings of $51.2 million, up 43 percent from the same quarter of 1979.

Southern ranks first among the nation's 14 major railroads in net railway operating income while ranking sixth in operating revenues.

As a result of the recession in business activity, Crane said overall car loadings have been softening in the second quarter and would affect 1980 results.

"The extent of this impact will depend on the depth and duration of the recession," he said. But Southern's historically high level of maintenance spending gives the company "some flexibility" in controlling its expenses, he added, particularly expenses for maintenance-of-way and equipment.

". . . and we believe that this will serve to moderate the effects of the current recession on our 1980 final results," he said.

In Crane's last report to stockholders -- he reaches the mandatory retirement age of 65 this year -- he was optimistic about the future of the rail industry and Southern's role in it.

He noted that Southern has continued to invest heavily in new cars, locomotives and facilities to be in position to handle the expansion in demand for rail services it expects as fuel costs continue to increase, making the fuel efficiency of rail more attractive.

In answer to a stockholder question, Crane said the railroad had no current plans, and wasn't discussing with anyone a possible merger or acquisition either in or out of the railroad business.

Although he estimated that the recently approved merger of the Burlington Northern and the Frisco may result in a $3 million loss of revenue for Southern, he said other proposed mergers may help Southern.

Crane told shareholders the proposed merger with Norfolk & Western was abandoned when "it just didn't seem to work out for Southern.

"It didn't seem feasible to maintain profitability while putting the two roads together," he said.

During the meeting, stockholders approved a new dividend reinvestment plan for holders of both common and preferred stock. Under the plan -- the first in the railroad industry -- stockholders may choose to have their dividends automatically invested in Southern common stock at a 5 percent discount from the market price, without brokerage fees and service charges.

In January, the dividend on common stock was increased from $3.20 to $3.68 per share on an annual basis. It had been increased a year earlier from $2.88 a share. The 1980 dividend action was the ninth increase in the last 10 years.