VMware delivers strong Q3 as CEO optimistic about Dell-EMC deal

VMware's third quarter was better than expected, but in line with what the company projected when Dell announced plans to buy EMC.

VMware reported strong third quarter results, but the results are likely to be overshadowed by Dell's acquisition of parent EMC.

VMware reported third quarter earnings of $256 million, or 60 cents a share, on revenue of $1.67 billion, up 10 percent from a year ago. Non-GAAP earnings were $1.02 a share.

Wall Street was looking for $1 a share on revenue of $1.66 billion.

Also: Dell, EMC deal could bolster Microsoft vs. VMware | Dell buys EMC for $67 billion: Will bigger be better?

The results were in line with what VMware projected when Dell announced its plan to buy EMC. VMware's results are likely to play second fiddle to the EMC and Dell merger. The big questions revolve around VMware's future as a tracking stock, a financial mechanism that may annoy investors given the lack of voting rights, and the reality that the company will be owned by a server vendor. As noted previously, VMware's biggest mission will be to fend off rivals such as Microsoft.

In a statement, VMware CEO Pat Gelsinger said he was "very optimistic about the long term value to VMware of the Dell and EMC plans to merge and the formation of the Cloud Services Business."

VMware ended the quarter with cash and short-term investments of $7.22 billion.

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