CBOE Holdings Inc. CBOE reported first-quarter 2016 operating earnings of 61 cents per share, which missed the Zacks Consensus Estimate of 62 cents by 1.6%. Earnings improved 22% year over year.CBOE Holdings, Inc. (CBOE) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompanyEarnings increased on account of increment in trading volumes that resulted in higher transaction fees. This was partially offset by higher operating expenses due to rise in royalty fees and compensation and benefits.Including one-time items, net income came in at 60 cents, up 20% year over year.Behind First-Quarter HeadlinesTotal operating revenue increased 14% year over year to $162.3 million primarily due to 20% higher transaction fees. In the reported quarter, Exchange services and other fees increased 17% to $11.3 million and Regulatory fees increased by 8.6% year on year to $9.1 million. This was partially offset by lower access fees, market data fees and other revenues. However, revenues missed the Zacks Consensus Estimate of $168 million by 3.1%.Total trading volume of CBOE Holdings remained almost flat year over year at 291.3 or 4.8 million contracts per day. Average daily trading volume in high-margin index options and futures contracts surged 28%, while lower margin multiply-listed options declined 14% year on year.Revenue per contract (RPC) increased 19% to 40.5 cents compared with 34 cents in the prior-year quarter. Increase in RPC was driven by higher volume from index options and futures contracts which generates highest RPC.Total operating expenses increased 13% year over year to $82.8 million, primarily due to higher royalty fees, compensation and benefits, depreciation and amortization, and professional fees and outside services costs. Total adjusted operating expenses rose 11% to $81.7 million. The company’s core operating expenses were up 6% to $50.9 million due to higher professional fees and outside services and compensation and benefits. Volume-based expenses, including royalty fees and order routing fees, increased 29% to $19.2 million on higher trading volume in licensed index and futures products.Operating margin rose 100 basis points year over year to 49.7% due to a higher revenue base.Financial UpdateAs of Mar 31, 2016, CBOE Holdings had cash and cash equivalents of $107.5 million, down 5.1% from $102.2 million at the end of 2015. Total assets came in at $394.8 million at the end of Mar 2016, up 2.6% from $384.8 million at year-end 2015.Long-term liabilities improved to $50.9 million from $51.1 million at year-end 2015, while total shareholders’ equity decreased to $247.9 million in the first quarter from $259.6 million as of Dec 31 2015.Net operating cash flow increased 24.2% year over year to $97.4 million in the first quarter.Share Repurchase UpdateCBOE Holdings bought back about 0.7 million shares for $42.4 million during the reported quarter at an average price of $63.6 per share. Notably, about 10.7 million shares worth $484.9 million have been repurchased since the inception of the share buyback program in 2011 at an average purchase price of $45.46 per share. The company had shares worth about $115.1 million remaining under its authorization as of Mar 31, 2016.2016 OutlookThe company reaffirmed its 2016 outlook. Core operating expenses are estimated in the range of $211–$215 million. Depreciation and amortization expenses are projected in the $46–48 million band. Continuing stock-based compensation expenses, included in core expenses, are expected at about $13.5 million in 2016. Additionally, accelerated stock-based compensation expenses, recognized on a quarterly basis, are expected at $1 million for 2016. The effective tax rate will likely be within 38.5–39.5%. Capital expenditure is projected in the range of $47–$49 million.Zacks Rank and Performance of Other StocksCBOE Holdings presently carries a Zacks Rank #3 (Hold). Among the other stocks in the sector, CME Group CME reported first-quarter 2016 earnings in line with the Zacks Consensus Estimate, while earnings at Nasdaq NDAQ beat the same. MarketAxess’ MKTX first-quarter earnings missed the Zacks Consensus Estimate.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CME GROUP INC (CME): Free Stock Analysis Report NASDAQ INC (NDAQ): Free Stock Analysis Report CBOE HOLDINGS (CBOE): Free Stock Analysis Report MARKETAXESS HLD (MKTX): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research