Cognizant's third-quarter revenue rose 4.6% to about $5.7 billion, but acquisitions and resold third-party products supplied roughly 4 points of that growth, and shares fell about 6% in midday trading. Bookings fell 7% year over year, and Health Sciences and Products and Resources, which together make up more than half of revenue, both shrank, while only Financial Services, up 12%, grew strongly. Operating margin was 15.4% on a GAAP basis, down 0.6 points, and adjusted EPS of $1.49 rose mainly because the share count was about 8% smaller, as adjusted net income slipped and free cash flow fell. The fourth-quarter outlook of 3.2% to 4.7% constant-currency growth points to further slowing. The article highlights what to watch: whether bookings rebound and whether growth excluding acquisitions and resale picks up.
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