IBM reported internet revenue  of $2.9 billion within the fourth quarter of 2022 and year-on-year will increase in income throughout all three of its enterprise segments.

That’s a rise in internet revenue of 9% in comparison with the overall reported for the corresponding quarter of 2021, or 17% evaluating solely persevering with operations: IBM spun off most its infrastructure administration division as a brand new enterprise, Kyndryl, in November 2021, and bought some property of its Watson Well being enterprise in January 2022.

On a convention name with analysts to debate the outcomes, CFO Jim Kavanaugh alluded vaguely to this leaving IBM with some stranded prices in its enterprise, saying, “We count on to handle these remaining stranded prices early within the yr and anticipate a cost of about $300 million within the first quarter.”

Later that day, in an interview with Bloomberg, Kavanaugh defined that eliminating these stranded prices — employees left with nothing to do following the asset disposals —  would end in IBM reducing about 3,900 jobs, or 1.5% of its workforce. An IBM consultant mentioned the corporate had “nothing additional so as to add.”

IBM CEO Arvind Krishna mentioned on the decision with analysts that the corporate’s fourth quarter and full yr outcomes reveal the profitable execution of its hybrid cloud and AI technique.

He famous that IBM was persevering with to spend money on giant language and basis fashions — the applied sciences behind instruments like ChatGPT — and is infusing these capabilities throughout the corporate’s AI portfolio. As well as, Krishna mentioned that enterprise with strategic companions, together with SAP, Microsoft and AWS, had generated over $1 billion in income for the yr.

“I’m assured in our potential to leverage hybrid cloud and AI to assist shoppers flip enterprise challenges into alternatives,” he mentioned.

Progress throughout all traces of enterprise

Krishna informed analysts that IBM had delivered robust income progress throughout its enterprise, with outcomes “broad-based” throughout its software program, consulting, and infrastructure segments in addition to throughout geographies.

Software program gross sales for the fourth quarter rose 2.8% from a yr earlier, to $7.3 billion, whereas infrastructure gross sales rose 1.6% to of $4.5B.

Consulting income additionally grew, however by simply 0.5%, to $4.8 billion. If it continues at that charge, it’s going to fall behind the market: Gartner forecast that international spending on consulting will develop 6.7% this yr to $264.9 billion.

IBM’s software program section was boosted by gross sales of its hybrid platform and options, up 5%, whereas automation, information and AI, and safety all contributed progress of 4%; transaction processing income was down by 3%. Income generated by Pink Hat accounted for the largest space of progress on this section, up 10% from a yr earlier.

The most important driver within the infrastructure section was the zSystems line of mainframe computer systems, up 16% after the z16 mannequin grew to become usually out there in Might. Nonetheless, distributed infrastructure income remained flat and infrastructure assist was down by 8% yr on yr.

Kavanaugh mentioned on the convention name that he hopes to squeeze one other $200 million revenue from the infrastructure section in 2023 by extending the interval over which it amortizes the price of its IT property. “Because of advances in expertise, we’re making an accounting change to increase the helpful lifetime of our server and networking gear,” he mentioned. “Given it is a change to the depreciation, there’s no profit to money.”