Visa Inc said on Wednesday quarterly profit rose 16 percent to $884 million, slightly beating expectations, as consumer spending ramped up and the company processed more transactions abroad.

But shares fell about 1.4 percent in after-hours trading, as the company failed to post the outsize profits investors have come to expect. Visa also has yet to address investor fears about how it will cope with looming U.S. regulation.

It was a good quarter, not a great quarter, in terms of beating expectation and clearly there are more issues at stake, said Signal Hill analyst Mayank Tandon. The market will be looking for some clarity of how they plan to mitigate the impact of regulation.

The U.S. Dodd-Frank financial reform law will restrict the fees that merchants pay banks and networks for processing debit card transactions. Visa's shares fell over 12 percent in December, after the Federal Reserve proposed a 75 percent cut to debit card processing fees, and have not fully recovered since.

The world's largest credit and debit card processing network reported a profit of $1.23 per share for its fiscal first quarter, ended December 31.

That compared with a year-ago profit of $763 million or $1.02 per share.

Analysts on average had expected Visa to earn $1.21 per share, according to Thomson Reuters I/B/E/S.

Visa shares closed up about 2 percent at $72.09 on Wednesday.

(Reporting by Maria Aspan; Editing by Steve Orlofsky)