NEW YORK (Reuters) - U.S. life and mortgage insurer Genworth Inc (GNW.N: Quote, Profile, Research) said on Thursday that net income fell in the fourth quarter, hurt by subprime mortgage losses, and that it was adopting a "cautious stance" for 2008.

The Richmond, Virginia-based company posted a net profit of $178 million, or 40 cents a share, compared with $373 million, or 81 cents in the year ago period.

Operating income, which is used by analysts to measure performance, was $314 million, or 71 cents per share, compared to $355 million, or 77 cents per share, in the fourth quarter last year.

While both net income and operating profit were lower than a year ago, the results beat average analysts expectations of 68 cents a share, according to Reuters Estimates.

The company said it recorded net investment losses of $134 million, including $123 million of impairments -- three-quarters of which were related to subprime and Alt-A residential mortgage and asset-backed securities. It also took a $2 million reduction in a previous gain.

Genworth and other private mortgage insurers have been hard hit by a rise in defaults on privately-insured mortgages, as a rising number of homeowners have struggled to stay current on home loan payments.

Defaults have included subprime and Alt-A loans, which often go to people that can't fully document their earnings or assets.

Private mortgage insurance enables people to buy homes with down payments of less than 20 percent. The insurance guarantees that lenders will be repaid even if borrowers default.

"We have a cautious stance toward 2008 results, given the accelerating downturn in the U.S. housing market, slowing global economies and a shifting interest rate environment," said Chief Executive Michael Fraizer, in a statement.