Dean Fails to Provide Answers After Chairman’s Exit

Dean Foods Co. declined to provide details on the departure of Chairman Tom C. Davis, sparking concern among investors and triggering a decline in the shares of the largest U.S. milk processor.
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The stock dropped as much as 18 percent at one stage on Monday, the biggest intraday decline in four years, before closing 2.9 percent lower at $17.21 in New York.
The company revealed in a securities filing late Friday that Davis resigned with immediate effect. Dean declined to elaborate Monday when asked about his exit during its second-quarter earnings conference call with analysts. Dean expects to announce succession plans “in the regular course,” Chief Executive Officer Gregg Tanner said on the call.

The Securities and Exchange Commission is pushing ahead with an insider-trading case that involves trading activity in Dean’s shares, the New York Times reported, citing people it didn’t name.
Jamaison Schuler, a spokesman for Dallas-based Dean, said the company has cooperated with the government’s information requests and will continue to do so. Because of the ongoing investigation it would be inappropriate to comment further at this time, he said in an e-mailed response to questions. Davis couldn’t immediately be reached for comment. Erin Stattel, an SEC spokeswoman, declined to comment on the probe.
The lack of commentary from Dean’s management on Davis’s exit “adds uncertainty” to the company’s outlook, although yesterday’s share-price decline appears “overdone,” Alexia Howard, an analyst at Sanford C. Bernstein & Co., said in a note.
Another reason for concern, Howard also said, is Dean’s forecast for lower volumes. While the company 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 Monday in a statement.
 
Source: Bloomberg
 

Mirá También

Así lo expresó Domingo Possetto, secretario de la seccional Rafaela, quien además, afirmó que a los productores «habitualmente los ignoran los gobiernos». Además, reconoció la labor de los empresarios de las firmas locales y aseguró que están «esperanzados» con la negociación entre SanCor y Adecoagro.

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