NEW YORK (

TheStreet

) --

VMware

(VMW) - Get Report

reported second-quarter earnings and announced a deal to

acquire

network virtualization software maker

Nicira

for more than $1 billion in cash.

Palo Alto, Calif.-based VMware reported earnings of 68 cents a share on revenue of $1.12 billion. Revenue increased 22% year-over-year. Analysts polled by

Thomson Reuters

were expecting earnings of 66 cents a share and revenue of $1.11 billion. The final results were in line with the company's

preliminary earnings

released less than a week ago.

VMware also announced the Nicira acquisition, which it expects to close during the second half of 2012. The deal will cost VMware approximately $1.05 billion in cash plus around $210 million of unvested equity. Nicira's Network Virtualization Platform already supports the cloud architecture of

AT&T

(T) - Get Report

,

eBay

(EBAY) - Get Report

,

Rackspace

(RAX)

and others.

"VMware has led the server virtualization revolution, and we have the opportunity to do the same in datacenter and cloud networking," said VMware CEO Paul Maritz, in a statement. "The acquisition of Nicira adds to our portfolio of networking assets and positions VMware to be the industry leader in software-defined networking."

VMware and its parent company,

EMC

(EMC)

, recently unveiled a management shuffle. Pat Gelsinger, currently EMC president and COO of Information Infrastructure Products, will succeed VMware's Paul Maritz as CEO come September.

Maritz will remain on the VMware Board of Directors and join EMC as Chief Strategist, reporting to CEO Joe Tucci. EMC's current CFO, David Goulden, will be EMC's COO starting in September. Like Maritz, Goulden will report to Tucci.

VMware shares dropped 0.63% to $89.23 on Monday. Shares were down slightly in after-hours, off 0.82% to $88.50 according to

Nasdaq.com

on share volume of 270,000.

--Written by Nathalie Pierrepont in New York.

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