Visa (NYSE: V) shares are trading sharply higher after hours Wednesday following better-than-expected first-quarter 2012 results. Shares last traded at $112.10, up over 4 percent from the close.

The company posted quarterly net income of $1.0 billion, or $1.49 per share, 4 cents better than the analyst estimate of $1.45. This was an increase of 21 percent over the prior year period.

Net operating revenue rose 14 percent from the first quarter of 2011 to $2.5 billion, which beat the consensus of $2.47 billion.

"Visa's core businesses drove a strong start to fiscal 2012. We achieved solid financial and operational performance as we continued to benefit from the secular shift to electronic payments. Consumers' desire to use our products is evident in the strong growth we see outside the U.S. and the resiliency we are seeing in the U.S. in the wake of debit regulation," said Joe Saunders, chairman and chief executive officer. "We are in the midst of executing on our strategy to address the new landscape in the United States and we are pleased with the early results of our efforts."

Payments volume growth was a positive 11 percent over the prior year at $994 billion. Cross-border volume growth, on a constant dollar basis, was a positive 13 percent. Total processed transactions, which represent transactions processed by VisaNet, for the quarter were 13.6 billion, an 8 percent increase over the prior year. Fiscal first-quarter 2012 service revenue was $1.2 billion, an increase of 14 percent versus the year-ago quarter. Service sales are recognized based on payments volume in the prior quarter.

Total operating expenses were $929 million for the quarter, a 7 percent increase over the prior year. Cash, cash equivalents, restricted cash, and available-for-sale investment securities were $7.9 billion at December 31, 2011. Visa's effective tax rate was 36 percent in the quarter.

The company also announced a $500 million buyback.

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