May 8--Genworth Financial continued to lose money on investments and on some operations in the first quarter of 2009, mounting its largest quarterly loss ever.

After Genworth's stock closed Thursday above $4 for the first time since November, the company reported that it had a net income loss of $469 million, or $1.08 per share, in the first quarter of 2009.

The last time the Richmond-based company had a quarterly profit was the first quarter of 2008, when it netted $116 million. In the past year Genworth, a major employer in Lynchburg, has lost about $1.16 billion while dealing with the effects of subprime mortgages and rising foreclosures.

Mike Fraizer, president and chief executive officer, said in a news release that Genworth is making "sound progress" in a difficult economy. The company's operating income -- before investment losses -- became positive again after having been negative in the fourth quarter of 2008, and the company had plenty of cash on hand at the end of the quarter.

"This was a difficult quarter from an overall earnings perspective, but we've made clear progress delivering on our refined specialist strategies," Fraizer said in a letter to investors. "And, we're taking the necessary steps to continue to strengthen our financial foundation and prepare for unforeseen circumstances, given today's realities."

The first quarter was marked with several actions by Genworth to limit its losses and make the company profitable again.

In January, the company laid off about 1,000 people from its global work force. In Lynchburg, about 230 were let go, leaving between 1,100 and 1,200 workers. The move was expected to save at least $100 million this year.

Many of the positions that were cut from Lynchburg were sales and middle-management posts, as well as the position of president of life insurance for Genworth. Those cuts were part of the company's goal to focus more on its strengths and sell a smaller set of insurance products going forward.

The financial results released on Thursday confirm that those changes are having an effect. Life insurance sales fell, but long-term care sales increased.

In his investors letter, Fraizer said, "Our sales levels this quarter were very consistent with this refined specialist strategy, capital management plans, current ratings, and the impact of the market environment."

Other than the layoffs, the company also struck a deal to sell one of its operating companies in Mexico during the first quarter. While it continued efforts to become a bank holding company in order to receive federal bailout money, it abandoned that strategy in April after missing the deadline to apply for bailout funds.

Most of Genworth's losses are related to the subprime loan market and foreclosures. The company wrote off $131 million in investments in subprime and other low-quality mortgages in the first quarter. Overall, the company had losses of $483 million in the quarter.

Genworth's U.S. mortgage division, which pays lenders when a foreclosure happens, had an operating loss of $135 million in the first quarter, compared to a loss of $36 million in the first quarter of 2008.

Frazier said that Genworth is working to ensure more mortgages have low risk profiles. He said there is good opportunity to increase the amount of solid new business in the mortgage insurance division later this year.

Frazier said that Genworth and its operating companies have more capital than is required by regulations, and the company can withstand further declines in the market. The company had $7.1 billion in cash and equivalents on hand at the end of the quarter, according to a news release.

Genworth is considering selling stock in its Canadian mortgage insurance business to raise more capital if necessary, according to Frazier's letter.

The company is holding a conference call for investors at 8 a.m. today

Genworth's stock closed at $4.59 on Thursday, up 78 cents.

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