Orthofix International N.V.'s shares sank Thursday after the medical device company reported a disappointing first quarter.

THE SPARK: The company said late Wednesday that it earned $2.1 million, or 11 cents per share, for the first three months of the year. That's down sharply from $12 million, or 64 cents per share, earned in the same quarter last year. After adjusting for a number of special items, it earned 23 cents per share versus 63 cents per share. Its total revenue fell 14 percent to $100.3 million.

Analyst polled by FactSet, on average, anticipated earnings of 66 cents per share on revenue of $111.2 million.

THE BIG PICTURE: Orthofix has undergone a number of big shakeups recently.

The company in November agreed to pay $30 million to the federal government to settle whistleblower allegations that a subsidiary paid illegal kickbacks to spinal physicians to use its products. The whistleblowers in that case claimed that an Orthofix subsidiary provided surgeons with travel, entertainment and benefits, including sham consulting, royalty and research deals.

In December, the company said that it had completed the settlement of all the civil and criminal cases filed against it tied to fraudulent claims made to Medicare and other federal health program at the cost of $43 million.

The Netherlands-based Orthofix also appointed Brad Mason as its new CEO in March, after its prior leader left to pursue other interests.

Mason said Wednesday that he is encouraged by the many strengths that he sees in the organization, but said the first quarter's sales and earnings results were disappointing.

"The good news is that the primary issues that led to these results are identifiable, within our control, and fixable," Mason said in a statement. "We are developing a strategy with specific initiatives that will both improve our internal competencies and drive growth."

THE ANALYSIS: Analysts were less optimistic. Spencer Nam of Janney Capital Markets downgraded the stock to "Neutral" from "Buy," and slashed his price target to $30 from $50, calling the quarter's results "a stunning miss."

Three straight quarters falling short with its spinal products leads him to be more cautious on the company, Nam said.

Jefferies analyst Raj Denhoy acknowledged the poor quarter and said Orthofix continues to be plagued by company-specific issues and challenging end markets. Denhoy did not change his "Buy" rating on the company, but will assess after a call in June during which the company will update guidance and present the new long-term strategy under Mason's leadership.

SHARE ACTION: Orthofix's shares fell $4.99, about 15.6 percent, to end the session at $27.01. Its shares fell as low as $23.50 earlier in the day, a 4-year low.