WALT Disney Co. said Tom Staggs is stepping down as chief operating officer, a move that muddies succession plans at the world's largest entertainment company.

Staggs, 55, will remain employed by the company in the role of special adviser to Chief Executive Officer Robert A.Iger through the current fiscal year ending in September, Burbank, California-based Disney said Monday in a statement. No reason was given for his departure.

Staggs was widely seen as the likely successor to Iger, whose contract runs through June 2018. Yet he had difficulty convincing some board members he was the right person to take over, according to a person with knowledge of the matter. He and Disney decided to part ways, said the person, who asked not to be identified discussing a personnel matter.

"It's shocking," said Laura Martin, an analyst at Needham & Co. "Tom was Wall Street's fair-haired boy. The market is going to be unhappy about this."

Disney shares fell as much as 1.8 percent to $96.90 in extended trading afterthe announcement. They lost 0.4 percent to $98.68 at the close in New York andhave dropped 6.1 percent this year.

A 26-year Disney veteran, Staggs rose through the ranks in a career that started in strategic planning before reaching the No. 2 spot. Disney said its board will broaden the scope of the succession planning process to identify a slate of candidates. Staggs didn't respond to a request for comment.

"Tom has been a great friend and trusted colleague for more than 20 years," Iger said in the statement. "He's made important contributions to this company, earning wide respect across the organization for his achievements and personal integrity."

Staggs, who previously led the company's parks and resorts division, became chief operating officer in February 2015, winning a two-person race for the job with former Chief Financial Officer Jay Rasulo. Another possible Iger successor, former TV division co-chair Anne Sweeney, left in January 2015.

The departure of Staggs means the world's largest entertainment company will have to start from scratch to find a new heir to Iger. An outsider is most likely, according to analyst Martin.

"Everyone in contention has left," she said. Staggs's exit "adds risk to the Disney strategy. Wall Street doesn't like uncertainty."

With the exception of former CEO Michael Eisner, Disney has most often been run by executives who worked their way up inside the company. Iger, 65, already has had his expected retirement date postponed.

Disney, like all media companies, has seen its shares tumble as investors worry about the loss of conventional TV viewers to Internet services like Netflix Inc. and Hulu LLC, in which Disney has a one-third stake.

Disney triggered a rout in media stocks in August 2015, when the company said on an earnings call that profit at the company's ESPN sports network wouldn't grow as quickly as projected because of viewer losses.

The parks business overseen by Staggs, meanwhile, has continued to flourish as the company approaches the June opening of its Shanghai resort, the company's biggest international investment. Profit at the parks increased 14 percent last year to $3.03 billion while revenue grew 7 percent to $16.2 billion.

Disney's movie business has also soared with hits like the new "Star Wars" film and a series of animated and live-action pictures, including superhero features based on Marvel comics.