Dean Foods Co., the largest U.S. milk processor, fell the most since November 2010 after the company declined to offer an explanation for the sudden resignation of its board chairman.
Dean fell 13 percent to $15.62 at 10:23 a.m. in New York. The shares earlier slid 18 percent, the biggest intraday decline since Nov. 9, 2010.
The Dallas-based company said in a securities filing late Aug. 7 that Chairman Tom C. Davis resigned from the board effective immediately. The company declined to comment further during a conference call with analysts to discuss second-quarter earnings Monday. Dean plans to announce a chairman succession “in due course,” it said on the call.
“Most of the decline is likely related to the company not giving color on why its chairman resigned abruptly on Friday,” Brett Hundley, a Richmond, Virginia-based analyst for BB&T Capital Markets, said in an e-mail Monday. Some of the decline also stems from a company forecast that volume may be weaker than expected in the third quarter amid increased competition, he said.
While Dean posted better-than-expected second-quarter earnings after benefiting from the global plunge in raw-milk prices, third-quarter volume declines will be “in the low single digits” and raw milk costs will rise “slightly,” the company said in a statement.