American Telephone & Telegraph Corp. said its earnings rose to $1.78 billion ($2.12 a share) in the quarter ended Feb. 28 from $1.46 billion ($1.88) a year earlier, and it reassured shareholders that the recent consent decree with the government is in "the best interest of all concerned."

The company, whose stock is the nation's most widely held issue, had 60 million more shares in the latest three-month period.

Revenues rose to $15.4 billion from $13.3 billion a year ago.

For the 12 months ended Feb. 28, AT&T earned $7.1 billion ($8.70), up from $6.1 billion ($8.10) the previous year. The higher per-share earnings were achieved despite an increase in the number of shares to 798 million in the latest period from 733 million in the earlier 12-month period.

Operating revenues in the 12 months rose to $59.6 billion from $51.7 billion a year earlier.

May Department Stores Co., owner of the Hecht Co. of Baltimore and Washington, reported yesterday that earnings for 1981 increased 7.9 percent to $126.2 million ($4.31 a share) from $117 million ($4.01) in 1980.

Sales increased 8 percent to $3.4 billion from $3.15 billion in 1980.

The company's board of directors also approved a 7.1 percent increase in the quarterly dividend payout to 45 1/2 cents a share from 42 1/2 cents. The increased dividend is payable June 15 to shareholders of record June 1.

Fourth-quarter earnings rose to $71.1 million ($2.43) from $67 million ($2.30) as sales grew from $1.05 billion to $1.11 billion.