UPDATE 3-Sun Life profit climbs, cautious on 2008

(Recasts with comments from conference call, updates share price)

By Lynne Olver

TORONTO, Feb 14 (Reuters) - Executives at Sun Life Financial Inc (SLF.TO: Quote, Profile, Research) said on Thursday the insurer delivered a solid fourth quarter, with a 2 percent rise in net income, but they remained cautious about ongoing pressures from the Canadian dollar and world financial markets.

"Sun Life has again delivered solid results," Chief Executive Don Stewart said on a conference call, during which he highlighted 2008 growth opportunities for the Canadian company in Asia, and India in particular.

The firm is "well aware of the current environment and the challenges this brings in 2008," Chief Financial Officer Rick McKenney said, citing declining interest rates, volatile equity markets and the strength of the Canadian dollar as "near term headwinds."

But Sun Life is still committed to its target of 10 percent growth in operating earnings per share, McKenney said on the call. It plans to use capital on internal growth and selective acquisitions, and to return capital to shareholders through dividends and share repurchases, he said.

Earlier on Thursday, Canada's third-largest life insurer reported a slight rise in fourth-quarter profit, which fell short of market expectations.

It also boosted its dividend to 36 Canadian cents a share from 34 Canadian cents.

Sun Life stock was down 3.7 percent at C$47.35 on the Toronto Stock Exchange Thursday afternoon. The stock is down about 15 percent year to date.