Chase Manhattan Corp., holding company for the nation's third-largest bank, said yesterday that its first-quarter profits dropped 17 percent from last year's level, but Bankers Trust New York Corp., Continental Illinois Corp. and European American Bancorp reported profit gains for the first three months of the years.

Chase's earnings totaled $73.5 million ($2 a share), down from $88.1 million ($2.59) in the 1980 period.

Chase said increased operating expenses offset gains that included $8 million from the sale of its minority interest in Banco Mercantia Y Agricola in Caracas. Net interest income -- the difference between interest paid out on deposits and taken in from loans and investments -- rose 3 percent, and other operating income was up 17 percent.

Continental Illinois Corp., owner of the nation's seventh-largest bank, Continental Illinois Bank & Trust Co. of Chicago, said its first-quarter profits were $62.1 million ($1.57 a share), up from $47.6 million ($1.21) a year earlier.

Continental Chairman Roger E. Anderson attributed the increase to higher net interest income and "significantly higher noninterest income" from a variety of sources, including substantial securities trading and foreign exchange profits, increased fee income from foreign and domestic sources, and a sizable gain on equity investments.

Bankers Trust New York Corp., owner of the eighth-largest Bankers Trust Co., reported first-quarter earnings of $40.8 million, up 8 percent from $37.7 million a year ago. Earnings per share amounted to $1.58 a year ago, reflecting the sale of additional common stock in July 1980.

Bankers Trust said that securities trading profits were $15.3 million, the third-highest quarterly profits in the corporation's history.

European American Bancorp reported net income of $8.9 million in the first quarter, an increase of 23 percent from $7.3 million in the same 1980 period. The holding company operates European American Bank & Trust Co. of New York, the 46th-largest bank in the country.

The company attributed itss improvement to gains in total interest income and other operating income.

Phillip Morris Inc. racked up a 22.4 percent earnings gain in the first quarter on an 11 1/2 percent sales rise.

Earnings were $150.1 million ($1.20 a share) on sales of $2.5 billion compared with $122.6 million (98 cents) a year earlier on sales of $2.3 billion.

Chairman George Weissman said unit sales were up in the quarter in all the company's cigarette brands. Export cigarette sales were bright, he added. Miller Brewing, Seven-Up and Mission Viejo wines all had improved revenues and earnings.

American Airlines Inc., reversing a $41.9 million loss in the 1980 first quarter, said yesterday that it earned $3.9 million (3 cents a share) in the first three months this year despite a decline in passenger traffic.

The air carrier said revenues rose 9.4 percent to $952.5 million from $871 million in the 1980 period and operating income improved to $8.4 million from the $68.9 million opeating loss a year ago.

W.R. Grace & Co., a chemical and energy combine, said yestereday that its first-quarter profits rose 26.5 percent to $1.72 a share from $1.36 a year ago.

Sales were up 8.2 percent at $1.482 billion from $1.369 billion, and net income climbed to $83 million from $65.84 million.

Operating earings were up 47 percent to $1.79 a share in the 1981 quarter but were reduced by losses on foreign currency translations and on some business divestments.

Continental Group earned a penny a share more in the first quarter than a year ago, but Chairman S. Bruce Smart Jr. expressed special gratification that the company topped last years' first quarter when earnings rose 56 percent.

Net income was $57.9 million ($1.57 a share) on revenues of $1.292 billion compared with $57.3 million ($1.56) a year ago on revenues of $1.264 billion.

This year's first-quarter profit included 11 cents a share in gains on the sale of the company's Canadian paper operations.

The company is in packaging, forest products, energy and insurance.

Borden Inc. reported that first-quarter earnings per share rose 12.2 percent to $1.10 from 98 cents a year earlier, taking into account a reduction in outstanding shares from a recent stock repurchase program.

Net income rose 5.3 percent to $32.2 million from $30.6 million a year ago. The net income gain was due to a drop in the effective tax rate rather than a rise in operating income.

Sales fell 1.6 percent to $1.053 billion from $1.070 billion, primarily due to disposal of operations under a restructuring program announced last July, the commpany said.

Union Pacific Corp. yesterday reported a 24 percent drop in first-quarter earings to $77.6 million ($1.07 a share) from $102 million (81 cents) a year earlier, largely due to higher petroleum prices.

Revenues jumped by 20 percent to $1.51 billion from $1.25 billion.

CBS Inc. said yesterday that its first-quarter profits rose 7 percent to $14 million (50 cents a share) from $13.1 million (47 cents) as revenues rose to $990.8 million from $968.9 million in the same period last year.

CBS had predicted a modest decline in first-quarter earning but said higher rating for the CBS Television Network resulted in a smaller decline in pretax income than earlier forecast.

Bendix Corp. said yesterday that its earings from continuing operations rose to $50.72 million ($2 a share) in its second fiscal quarter ended March 31 from $36.04 million ($1.54) last year, but gains from the sale of its forest products business and the first phase of the sale of its investment in Asarco Inc. boosted total income to $268.12 million.

Income from discontinued operations amounted to $217.4 million ($8.55 a share) in the latest quarter, boosting total earnings to $10.55 a share from $2.14 a share in the same 1980 period, when total earnings were $50.22 million. Discontinued operations produced a $14.18 million profit in the 1980 second quarter.

Revenues rose 22.8 percent in the three months ended March 31 to $1.2 billion from $943 billion a year earlier.

Revenue and profits roses "due to the improved performances of our automative and aerospace-electronics business," said Bendix Chairman and President William M. Agee. The improvement also was aided by inclusion of the results of Warner & Swasey Co., an industrial equipment subsidiary acquired last year.

E.F. Hutton Group Inc. reported yesterday that trading profits and investment banking gains helped raise first-quarter earings 12.7 percent to $22.58 million ($1.55 a share) from $20.04 million ($1.53) despite declining commissions from stock and commodity transactions.

The parent of E.F. Hutton & Co., a major New York-based investment firm, aid its revenues increased to $320.33 million from $261.6 million in the same 1980 period.