Dean Foods's steeper-than-expected decline in quarterly sales and surprise departure of its chairman ahead of the earnings report sent shares of the largest US milk processor down as much as 18 per cent on Monday.
The company in a two-line regulatory filing late on Friday said chairman Tom Davis had resigned, effective immediately, without giving any details.
Chief executive Gregg Tanner on a post-earnings call on Monday also did not explain Mr Davis' sudden departure.
The maker of Meadow Gold and Dean’s Milk reported a 15.8 per cent fall in quarterly sales as volumes declined after the company kept its prices high despite a drop in raw milk costs.
US raw milk prices fell 33 per cent in the second quarter ended June due to a decline in demand from China and Russia's ban on US milk and dairy imports.
Sales fell to $2.01 billion, the second drop in five quarters, missing analysts expectations. Total volume declined 3.1 per cent.
Net profit was $26.5 million, or 28 US cents per share, in the quarter, compared with a net loss a year earlier. Excluding items, it earned 33 cents per share, topping analysts’ estimates by seven cents.
– Reuters
