New York-based Salomon Inc. reported a drop...

New York-based Salomon Inc. reported a drop in profit for 1986 of 7.4%. Net earnings also were down in the fourth quarter. Fourth-quarter revenue gains failed to keep pace with cost increases attributable to staff and office expansion at Salomon Bros.’ London, Tokyo and New York locations, a spokesman said. This expansion should reap future benefits for the firm, especially in the developing overseas markets.