International Business Machines Corp.'s earnings plunged 21.6 percent in the third quarter to $693 million, the company said yesterday. IBM, the world's largest producer of data-processing equipment, blamed foreign exchange losses for the slide.

Steve Dube, an analyst for the investment firm of Dean Witter Reynolds, said the sharp decline in profits was no cause for alarm. Foreign exchange losses are "a major problem for all multinational companies, and IBM is no exception," Dube said.

IBM President John R. Opel said the rising value of the dollar hurt the computer giant's business overseas, where income and expenses are in foreign currencies that have suffered at the expense of the dollar's gains.

Third-quarter earnings equaled $1.18 a share and came on revenues of $6.7 billion. Earnings for the 1980 third quarter were $884 million ($1.51 a share) on revenues of $6.5 billion.

Nine-month earnings fell 4.4 percent to $2.2 billion ($3.80) on revenues of $20.1 billion from earnings of $2.3 billion ($3.99) on revenues of $18.4 billion in the same period a year ago.

Merrill Lynch & Co., the financial services giant, reported yesterday that third-quarter earnings fell to $35.3 million (88 cents a share) from $49.6 million ($1.56) a year ago on 10 percent fewer shares, reflecting pressures on interest-rate margins and a lower volume of stock trading.

Revenues increased, however, to $1.01 billion from $710 million.

Roger E. Birk, Merrill Lynch chairman and chief executive, said "in an extremely mixed and volatile environment, our results were relatively strong by historic standards even though below recent peak levels."

He said commission income declined 21 percent to $217 million in the third quarter because of reduced volume in equities and options.

Although net interest income rose 129 percent to $500 million in the quarter, the corporation's interest expense rose by 145 percent to $414 million.

Nine-month earnings were $148 million ($3.77) on revenues of $2.9 billion compared with earnings of $149.4 million ($4.10) a year earlier on revenues of $2.2 billion.

International Paper Co.'s third-quarter profits fell to $54 million (95 cents a share) from $70.7 million ($1.30) a year ago, primarily because of poor lumber sales due to the weak construction market, the company said yesterday. The paper business held up relatively well.

Sales edged up to $1.27 billion from $1.26 billion.

Chairman Dr. Edwin A. Gee said interest costs also were a big factor in the profit shrinkage.

Nine-month net income totaled $285.4 million ($5.37) on sales of $4 billion compared with net income a year earlier of $236.7 million ($4.54) on sales of $3.8 billion.

The company said $210 million profit on the sale of Canadian International Paper Co. will be reported in the final quarter.

PPG Industries Inc. reported a slight rise in third-quarter earnings despite sluggish demand from the auto and housing markets.

The glass, chemical and paint manufacturer said net income rose to $49.7 million ($1.47 a share) from $47.8 million ($1.44) in the like period a year ago. Sales increased to $847.5 million from $765.3 million.

For the first nine months, PPG earned $166.2 million ($4.95), up from $142.2 million ($4.32). Sales in that span were $2.55 billion compared with $2.32 billion.