Information technology consultant Cognizant (NASDAQ:CTSH) recorded a negative total return of 12.2%, subtracting 39 basis points from the Fund’s return. The company reported disappointing quarterly earnings, and meaningfully reduced its financial guidance for the full year as a result. Cognizant didn’t win enough new business in the quarter to offset the loss of several large contracts due to client consolidation in health care and in-sourcing in financial services. We attribute the disappointing performance to the distraction caused by a leadership transition, as co-founder and CEO Francesco D’Souza announced his retirement on February 6. New CEO Brian Humphries, who joined the company from Vodafone Business, didn’t start until April 1. We expect performance to improve now that the leadership transition is complete.
From Parnassus Fund's second-quarter 2019 commentary.
