Valaris Ltd (VAL) shares are soaring 5.04% in pre-market trading on Thursday following the release of its impressive first-quarter 2025 earnings report. The offshore drilling contractor significantly outperformed analyst expectations, demonstrating resilience in a challenging market environment.

The company reported adjusted earnings of $1.93 per share for the quarter ended March 31, substantially beating the mean analyst estimate of $1.23 per share. This result also marks a significant improvement from the same quarter last year when Valaris posted earnings of 35 cents per share. Revenue for the quarter rose 18.2% year-over-year to $620.70 million, surpassing analyst projections of $582.90 million.

Despite the strong operational performance, Valaris reported a quarterly loss of $37.9 million on a GAAP basis, translating to a loss of 53 cents per share. This discrepancy highlights the ongoing challenges in the offshore drilling sector. The positive market reaction suggests investors are focusing on the company's ability to exceed expectations and deliver strong top-line growth. It's worth noting that Valaris shares had fallen 17.7% this quarter and 27.0% year-to-date prior to this earnings release, indicating that the market is welcoming this positive surprise. Wall Street maintains a generally optimistic outlook on Valaris, with a median 12-month price target of $53.00 and an average "buy" recommendation from analysts.