* Reports earnings per share of $1.32 vs estimates for $1.30
* Says new CFO's productivity focus will benefit portfolio
* Group banks on new products to fill Diovan patent loss gap
ZURICH, April 24 (Reuters) - Novartis named Harry Kirsch as its new CFO, betting that his experience of improving performance at the Swiss drugmaker's pharmaceuticals division will help it navigate a wave of patent expiries.
The surprise announcement is the second leadership change in as many quarters after Chairman Daniel Vasella stepped down in February after 17 years leading the group.
The company said Kirsch, 48, chief financial officer (CFO) of Novartis' pharmaceuticals unit who was previously CFO at Proctor & Gamble's pharmaceutical business, had increased the division's core operating income in every quarter of 2011 and 2012 despite the loss of patents on top drugs.
"(Kirsch) has been very effective in driving productivity and ensuring that the performance of the pharmaceuticals division was positive even in the phase of patent expiries," Chief Executive Joseph Jimenez told reporters.
In its pharmaceuticals division, first-quarter sales held up at $7.9 billion as new products such as multiple sclerosis treatment Gilenya, up 71 percent, and cancer drug Afinitor, up 114 percent, helped offset the impact of generics.
Jon Symonds, CFO for the past four years, will serve as adviser to the CEO until the end of the year, Novartis said.
Analysts were perplexed by the sudden change. Citi analyst Andrew Baum, said it could reflect a wish by Jimenez to name his own team, as Symonds was appointed by Vasella before he left.
A TRANSITION YEAR
Novartis expects 2013 to be a year of transition as it bears the full brunt of last year's patent loss on its blockbuster blood pressure drug Diovan. It is counting on sales of new products, like Afinitor, to fill the gap.
The Basel-based group has forecast flat net sales this year and a mid-single digit decline in its core operating margin on a constant currency basis in 2013, as it expects competition from copycat drugs to knock up to $3.5 billion off sales.
Net sales in the first quarter rose 2 percent to $14.02 billion, helped by delays to a generic competitor for Diovan, while core earnings per share rose 6 percent to $1.32. Analysts in a Reuters poll had forecast core EPS of $1.30 on average.
Sales also rose across Novartis' four other divisions, with its vaccines and diagnostics unit benefitting from a late flu season. At Novartis' eye-care unit Alcon, sales were hampered by a slowdown in cataract operations.
Shares in Novartis, which have risen almost 40 percent over the past twelve months, were down 0.1 percent at 69.20 by 0743 GMT, compared with a slightly weaker European healthcare sector. .
Novartis has sought to cut costs ahead of patent expiries on its top medicines and as prices come under pressure from cash-strapped healthcare systems. It produced savings of 250 million in the first-quarter.
Novartis booked a $51 million writedown in its Consumer Health Division, after deciding to cut 300 jobs over the next two years at its factory in Lincoln, Nebraska which has been plagued by quality issues.
Also on Wednesday, Novartis said new chairman Joerg Reinhardt would receive an annual salary of 3.8 million Swiss francs ($4 million) as well as 2.6 million euros to compensate for lost earnings from his previous company, Bayer.
A planned $78 million payoff for Vasella sparked outrage in Switzerland, forcing Novartis to scrap it.