VAL

Valaris Limited (VAL) came out with quarterly earnings of $0.72 per share, beating the Zacks Consensus Estimate of $0.46 per share. This compares to earnings of $1.61 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +56.52%. A quarter ago, it was expected that this company would post a loss of $0.05 per share when it actually produced a loss of $0.24, delivering a surprise of -380%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Valaris, which belongs to the Zacks Oil and Gas - Drilling industry, posted revenues of $539.2 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 7.84%. This compares to year-ago revenues of $615.2 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Valaris shares have added about 55% since the beginning of the year versus the S&P 500's gain of 13%. While Valaris has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Valaris was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.26 on $577 million in revenues for the coming quarter and $3.18 on $2.17 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Oil and Gas - Drilling is currently in the bottom 19% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Vaalco Energy (EGY), another stock in the broader Zacks Oils-Energy sector, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This oil and natural gas explorer is expected to post quarterly earnings of $0.05 per share in its upcoming report, which represents a year-over-year change of +150%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Vaalco Energy's revenues are expected to be $122.5 million, up 26.4% from the year-ago quarter. 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 Valaris Limited (VAL) : Free Stock Analysis Report Vaalco Energy Inc (EGY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

HAMILTON, Bermuda, August 05, 2026--(BUSINESS WIRE)--Valaris Limited (NYSE: VAL) ("Valaris" or the "Company") today reported second quarter 2026 results. President and Chief Executive Officer Anton Dibowitz said, "I want to thank our teams across the organization for their unwavering commitment to safe, reliable and efficient operations. Together we delivered another quarter of strong performance, highlighted by revenue efficiency of 98% and the successful startup of two drillships. These achievements helped drive solid financial results despite the impact of the ongoing conflicts in the Middle East." Dibowitz added, "We successfully returned VALARIS DS-12 and DS-10 to work on schedule and on budget during the second quarter. With two additional drillships set to commence new contracts before year-end, these rig startups, together with continued strong operational execution across our fleet, are expected to drive further improvement in our financial performance over the remainder of the year." Dibowitz concluded, "We remain positive on the outlook for offshore drilling. The pipeline of deepwater contract opportunities remains robust, and we expect to see further awards across the industry, supported by favorable market fundamentals and strong customer demand for high-specification assets. We are also excited about the pending business combination with Transocean, which is on track to close in the fourth quarter of 2026. The combination is expected to deliver meaningful value to our shareholders through anticipated synergies and the enhanced capabilities of the combined company." Financial and Operational Highlights Total operating revenues of $539 million and net income of $47 million Adjusted EBITDA of $97 million, which includes approximately $30 million of negative impacts from the Middle East conflicts Revenue efficiency of 98% during the quarter and year to date Successful startup of drillships VALARIS DS-12 and DS-10 for new contracts Added more than $160 million of backlog for the North Sea jackup fleet, further enhancing Valaris' industry-leading contract coverage for jackups across 2026 and 2027 High-graded the fleet through the sale of long-term stacked jackups VALARIS 104 and 109 in June and July 2026, respectively, for total cash proceeds of $74 million Second Quarter Review Net income of $47 million compared to net loss of $18 million in the first quarter 2026. Net income included a gain on the sale of assets of $38 million compared to a loss of $2 million in the first quarter. Adjusted EBITDA of $97 million compared to $67 million in the first quarter 2026. Revenues exclusive of reimbursable items increased to $502 million from $430 million in the first quarter 2026, primarily due to more operating days for the floater fleet as three drillships recently commenced new contracts, with one commencing late in the first quarter and the other two during the second quarter. Contract drilling expenses exclusive of reimbursable items increased to $380 million from $340 million in the first quarter 2026, primarily due to incremental operating costs associated with the three drillships that recently commenced new contracts, higher repair and maintenance costs largely associated with planned shipyard projects, and a full quarter of higher costs to maintain insurance coverage for war-related risks for jackups that Valaris operates in the Middle East. These items were partially offset by the reversal of a previously recognized bad debt expense following the collection of long-outstanding customer invoices. General and administrative expenses increased to $27 million from $25 million in the first quarter 2026. Merger and integration expenses, which are primarily related to professional fees incurred in connection with the pending business combination with Transocean, decreased to $11 million from $14 million in the first quarter 2026. Other income of $30 million compared to other expense of $10 million in the first quarter 2026, primarily due to a gain on the sale of jackup VALARIS 104. Tax expense increased to $34 million from $28 million in the first quarter 2026. The second quarter tax provision included a $6 million discrete tax benefit and the first quarter tax provision included a $2 million discrete tax expense, which were primarily related to the resolution of prior period tax matters. Adjusted for these items, tax expense increased to $40 million from $26 million in the first quarter due to higher income before tax and a change in the jurisdictional mix of income. Capital expenditures increased to $106 million from $101 million in the first quarter 2026. Cash and cash equivalents decreased to $541 million as of June 30, 2026, from $578 million as of March 31, 2026, primarily due to capital expenditures, partially offset by cash flow from operations and proceeds from asset sales. Conflicts in the Middle East The ongoing conflicts in the Middle East negatively impacted Adjusted EBITDA by approximately $30 million compared to $8 million in the first quarter, primarily due to a full quarter of higher costs to maintain insurance coverage for war-related risks for jackups operated by Valaris in the region, as well as incremental costs and lower revenues associated with project delays for VALARIS 250 and 116, which were undergoing planned maintenance and contract preparation projects in shipyards located in the region. Based on information currently available, we expect these adverse impacts to moderate in the second half of 2026, as VALARIS 250 recommenced its bareboat charter contract in July and VALARIS 116 is expected to recommence its bareboat charter in the third quarter. In addition, insurance costs to maintain war-related coverage are expected to be lower than those incurred in the first half of the year primarily due to the sale of VALARIS 104 and lower premiums from securing longer term coverage. Second Quarter Segment Review Floaters Revenues exclusive of reimbursable items increased to $279 million from $193 million in the first quarter 2026, primarily due to more operating days for VALARIS DS-17, DS-12 and DS-10, as DS-17 commenced a new contract late in the first quarter and DS-12 and DS-10 commenced new contracts during the second quarter. Contract drilling expenses exclusive of reimbursable items increased to $168 million from $151 million in the first quarter 2026, primarily due to incremental operating costs associated with the three drillships that recently commenced new contracts. This was partially offset by the reversal of a previously recognized bad debt expense following the collection of long-outstanding customer invoices. Jackups Revenues exclusive of reimbursable items decreased to $183 million from $196 million in the first quarter 2026, primarily due to fewer operating days for VALARIS 117, which completed its contract early in the second quarter and began planned maintenance and contract preparations in the shipyard, as well as lower average daily revenues driven by lower day rate accommodation services provided by certain North Sea jackups. Contract drilling expenses exclusive of reimbursable items increased to $144 million from $129 million in the first quarter 2026, primarily due to higher repair and maintenance costs, largely attributable to planned maintenance for VALARIS 117 and leg repairs for VALARIS 106, as well as a full quarter of higher costs to maintain insurance coverage for war-related risks for jackups operated by Valaris in the Middle East. ARO Drilling Revenues of $127 million were in line with the first quarter 2026. Contract drilling expenses decreased to $72 million from $75 million in the first quarter, primarily due to adjustments recorded by ARO in connection with the current quarter finalization of its 2025 financial statements. This was partially offset by higher repair and maintenance costs for rigs undergoing shipyard projects and higher personnel costs. Other Revenues exclusive of reimbursable items decreased to $40 million from $42 million in the first quarter 2026. Contract drilling expenses exclusive of reimbursable items increased to $27 million from $23 million in the first quarter, primarily due to planned maintenance and contract preparation projects for VALARIS 250 and 116, as well as a full quarter of higher costs to maintain insurance coverage for war-related risks for those rigs. Conference Call In connection with the pending business combination with Transocean Ltd., announced on February 9, 2026, Valaris does not intend to hold future earnings conference calls or provide updates to forward-looking guidance. About Valaris Limited Valaris Limited (NYSE: VAL) is an industry leader in offshore drilling services across all water depths and geographies. Operating a high-quality rig fleet of ultra-deepwater drillships, versatile semisubmersibles, and modern shallow-water jackups, Valaris has experience operating in nearly every major offshore basin. Valaris maintains an unwavering commitment to safety, operational excellence, and customer satisfaction, with a focus on technology and innovation. Valaris Limited is a Bermuda exempted company limited by shares (Bermuda No. 56245). To learn more, visit the Valaris website at www.valaris.com. Forward-Looking Statements Statements contained in this press release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include words or phrases such as "anticipate," "believe," "estimate," "expect," "intend," "likely," "outlook," "plan," "project," "could," "may," "might," "should," "will" and similar words and specifically include statements regarding expected financial performance; expected utilization, day rates, revenues, operating expenses, cash flows, contract status, terms and duration, contract backlog, capital expenditures, insurance, financing and funding; the offshore drilling market, including supply and demand, customer drilling programs and the attainment of requisite permits for such programs, stacking of rigs, effects of new rigs on the market and effect of the volatility of commodity prices; expected work commitments, awards, contracts and letters of intent; scheduled delivery dates for rigs; performance and expected benefits of our joint ventures, including our joint venture with Saudi Aramco; timing of the delivery of the Saudi Aramco Rowan Offshore Drilling Company ("ARO") newbuild rigs and the timing of additional ARO newbuild orders; the availability, delivery, mobilization, contract commencement, availability, relocation or other movement of rigs and the timing thereof; rig reactivations; suitability of rigs for future contracts; divestitures of assets; general economic, market, business and industry conditions, trends and outlook; general political conditions, including political tensions, conflicts and war; cybersecurity attacks and threats; uncertainty around the use and impacts of artificial intelligence applications; impacts and effects of public health crises, pandemics and epidemics; future operations; ability to renew expiring contracts or obtain new contracts; increasing regulatory complexity; targets, progress, plans and goals related to sustainability matters; the outcome of tax disputes; assessments and settlements; and expense management. The forward-looking statements contained in this press release are subject to numerous risks, uncertainties and assumptions that may cause actual results to vary materially from those indicated, including risks associated with the pending transaction with Transocean Ltd., including, among others, the completion of the pending transaction on the anticipated terms and timing, or at all, the risk that disruptions from the transaction will harm our business, including current plans and operations, the diversion of management's time and attention from ordinary course operations to completion of the pending transaction and certain restrictions during the pendency of the transaction that may impact our business; cancellation, suspension, renegotiation or termination of drilling contracts and programs; our ability to obtain financing, service our debt, fund capital expenditures and pursue other business opportunities; adequacy of sources of liquidity for us and our customers; future share repurchases; actions by regulatory authorities, or other third parties; actions by our security holders; internal control risk; commodity price fluctuations and volatility, customer demand, loss of a significant customer or customer contract, downtime and other risks associated with offshore rig operations; adverse weather, including hurricanes; changes in worldwide rig supply; and demand, competition and technology; supply chain and logistics challenges; consumer preferences for alternative fuels and forecasts or expectations regarding the global energy transition; increased scrutiny of our sustainability targets, initiatives and reporting and our ability to achieve such targets or initiatives; changes in customer strategy; future levels of offshore drilling activity; governmental action, civil unrest and political and economic uncertainties, including recessions, inflation, volatility affecting financial markets and the banking system, changing tariff policies, trade disputes, and adverse changes in the level of international trade activity; terrorism, piracy and military action (including conflicts in the Middle East and potential disruptions to key shipping lanes such as the Strait of Hormuz); risks inherent to shipyard upgrade, repair, maintenance, enhancement or rig reactivation; our ability to enter into, and the terms of, future drilling contracts; suitability of rigs for future contracts; the cancellation of letters of intent or letters of award or any failure to execute definitive contracts following announcements of letters of intent, letters of award or other expected work commitments; the outcome of litigation, legal proceedings, investigations or other claims or contract disputes; governmental regulatory, legislative and permitting requirements affecting drilling operations; our ability to attract and retain skilled personnel on commercially reasonable terms; the use of artificial intelligence by us, third-party service providers or our competitors; environmental or other liabilities, risks or losses; compliance with our debt agreements and debt restrictions that may limit our liquidity and flexibility, including in any return of capital plans; cybersecurity risks and threats; and changes in foreign currency exchange rates. In addition to the numerous factors described above, you should also carefully read and consider "Item 1A. Risk Factors" in Part I and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II of our most recent annual report on Form 10-K, which is available on the Securities and Exchange Commission's website at www.sec.gov or on the Investor Relations section of our website at www.valaris.com. Each forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to update or revise any forward-looking statements, except as required by law. Non-GAAP Financial Measures (Unaudited) To supplement Valaris’ condensed consolidated financial statements presented on a GAAP basis, this press release provides investors with Adjusted EBITDA, which is a non-GAAP measure. Valaris defines "Adjusted EBITDA" as net income (loss) before income tax expense, interest expense, other (income) expense, depreciation expense, other operating (income) loss, (gain) loss on sale of property, merger and integration expenses, and equity in (earnings) losses of ARO. Adjusted EBITDA is a non-GAAP measure that our management uses to facilitate period-to-period comparisons of our core operating performance and to evaluate our long-term financial performance against that of our peers. We believe that this measure is useful to investors and analysts in allowing for greater transparency of our core operating performance and makes it easier to compare our results with those of other companies within our industry. Adjusted EBITDA should not be considered (a) in isolation of, or as a substitute for, net income (loss), (b) as an indication of cash flows from operating activities, or (c) as a measure of liquidity. Adjusted EBITDA may not be comparable to other similarly titled measures reported by other companies. Valaris defines "ARO Adjusted EBITDA" as ARO's net income (loss) before income tax expense, other expense, net, and depreciation expense. ARO Adjusted EBITDA is a non-GAAP measure that our management uses to facilitate period-to-period comparisons of ARO's core operating performance and to evaluate ARO's long-term financial performance against that of ARO's peers. We believe that this measure is useful to investors and analysts in allowing for greater transparency of ARO's core operating performance and makes it easier to compare ARO's results with those of other companies within ARO's industry. ARO Adjusted EBITDA should not be considered (a) in isolation of, or as a substitute for, net income (loss), (b) as an indication of cash flows from operating activities, or (c) as a measure of liquidity. ARO Adjusted EBITDA may not be comparable to other similarly titled measures reported by other companies. Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures prepared in accordance with GAAP. Reconciliation of Net Income (Loss) to Adjusted EBITDA A reconciliation of net income (loss) as reported to Adjusted EBITDA is included in the tables below (in millions): A reconciliation of net income as reported to ARO Adjusted EBITDA is included in the tables below (in millions): View source version on businesswire.com: https://www.businesswire.com/news/home/20260805757585/en/ Contacts Investor & Media Contact:Tim RichardsonDirector - Investor Relations+1-713-979-4619

Valaris Limited (VAL) could be a solid addition to your portfolio given a notable revision in the company's earnings estimates. While the stock has been gaining lately, the trend might continue since its earnings outlook is still improving. The upward trend in estimate revisions for this company reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. This insight is at the core of our stock rating tool -- the Zacks Rank. The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008. For Valaris Limited, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year. The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate: The company is expected to earn $0.41 per share for the current quarter, which represents a year-over-year change of -74.5%. The Zacks Consensus Estimate for Valaris has increased 36.67% over the last 30 days, as one estimate has gone higher compared to no negative revisions. The company is expected to earn $3.41 per share for the full year, which represents a change of -24.6% from the prior-year number. In terms of estimate revisions, the trend for the current year also appears quite encouraging for Valaris. Over the past month, one estimate has moved higher compared to no negative revisions, helping the consensus estimate increase 5.9%. The promising estimate revisions have helped Valaris earn a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision.You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500. Valaris shares have added 29.2% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects. 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 Valaris Limited (VAL) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

The past six months have been a windfall for Valaris’s shareholders. The company’s stock price has jumped 73.3%, hitting $98.86 per share. This was partly thanks to its solid quarterly results, and the performance may have investors wondering how to approach the situation. Is now the time to buy Valaris, or should you be careful about including it in your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free. Despite the momentum, we're cautious about Valaris. Here are three reasons why VAL doesn't excite us and a stock we'd rather own. Cyclical sectors like Energy often flatter weaker operators during favorable price environments, but a longer-term lens separates those from businesses that can consistently perform across market cycles. Over the last five years, Valaris grew its sales at a decent 11.6% compounded annual growth rate. Its growth was slightly above the average energy upstream and integrated energy company and shows its offerings resonate with customers. In a single quarter or year, gross margins in the sector can swing wildly due to commodity prices, hedging, or changes in labor costs. Over a multi-year period across different points in the cycle, gross margin differences can signal whether a company is a structurally-advantaged producer (“rock” quality, takeaway, operating costs) or not. Valaris, which averaged 21.1% gross margin over the last five years, exhibiting bottom-tier unit economics in the sector. It means the company will struggle at higher commodity prices than peers with better gross margins. Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king. Valaris’s demanding reinvestments have drained its resources over the last five years, putting it in a pinch and limiting its ability to return capital to investors. Its free cash flow margin averaged negative 5.5%, meaning it lit $5.46 of cash on fire for every $100 in revenue. Valaris isn’t a terrible business, but it isn’t one of our picks. Following the recent rally, the stock trades at 18.8× forward P/E (or $98.86 per share). This valuation tells us it’s a bit of a market darling with a lot of good news priced in - we think there are better opportunities elsewhere. Let us point you toward a top digital advertising platform riding the creator economy. ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum - both boxes checked at the same time. Find out which stocks our AI platform is flagging this week. See this week's Strong Momentum stocks - FREE. Get Our Strong Momentum Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.

HAMILTON, Bermuda, May 04, 2026--(BUSINESS WIRE)--Valaris Limited (NYSE: VAL) ("Valaris" or the "Company") today reported first quarter 2026 results. President and Chief Executive Officer Anton Dibowitz said, "Thank you to the entire Valaris team for a strong start to the year. We delivered safe and reliable operations for our customers, achieving revenue efficiency of 98% in the first quarter. We expect a meaningful improvement in our financial results through 2026, supported by strong project delivery and operational execution, with the DS-12 having successfully returned to operations ahead of schedule and three additional drillships from our active fleet on track to restart later this year." Dibowitz added, "We continue to execute our commercial strategy, adding over $500 million of new contract backlog since reporting our fourth quarter results, including a multi-year extension for VALARIS DS-4 offshore Brazil that secures continuous work for the rig into 2030. As a result, total backlog now stands at approximately $4.9 billion, our highest level in nearly a decade, further supporting future earnings and cash flow." Dibowitz continued, "We remain positive on the outlook for offshore drilling, supported by improving market fundamentals. While the ongoing conflicts in the Middle East have created near-term uncertainty, they reinforce the strategic importance of energy security and the need for sustained upstream investment to help ensure reliable and affordable energy supply." Dibowitz concluded, "During the quarter, we were pleased to announce an all-stock transaction with Transocean that will benefit our shareholders, customers and employees. The transaction is expected to deliver meaningful value to Valaris shareholders through anticipated synergies and the opportunity to participate in the future upside potential of a combined company that is capable of operating any rig at any water depth in any offshore environment around the world." Financial and Operational Highlights Total operating revenues of $465 million and a net loss of $18 million Revenue efficiency of 98% Adjusted EBITDA of $67 million Announced an all-stock transaction with Transocean that is expected to deliver meaningful value to Valaris shareholders Secured over $500 million of new contract backlog since reporting fourth quarter 2025 results, increasing total backlog to approximately $4.9 billion Entered into a strategic collaboration agreement with Petronas Suriname and Halliburton to support development of Petronas Suriname's offshore assets VALARIS 248 received the Chairman's Award for Jackup Rigs at the 2026 IADC North Sea Chapter Annual Safety Awards in recognition of the rig's safety performance in 2025 First Quarter Review Net loss of $18 million compared to net income of $717 million in the fourth quarter 2025. Net loss included a tax expense of $28 million compared to a tax benefit of $680 million in the fourth quarter. Adjusted EBITDA of $67 million compared to $97 million in the fourth quarter. Revenues exclusive of reimbursable items decreased to $430 million from $502 million in the fourth quarter 2025, primarily due to fewer operating days across both the floater and jackup fleets. Contract drilling expenses exclusive of reimbursable items decreased to $340 million from $380 million in the fourth quarter 2025, primarily due to fewer operating days for the floater fleet and the deferral of contract preparation costs for certain rigs. These items were partially offset by an $8 million increase in costs related to the ongoing conflicts in the Middle East, primarily the incremental cost to maintain insurance coverage for war-related risks for jackups that Valaris operates in the region. General and administrative expenses decreased to $25 million from $27 million in the fourth quarter 2025, primarily due to lower professional fees. First quarter 2026 included $14 million of merger and integration expenses, primarily related to professional fees incurred in connection with the pending business combination with Transocean. Other expense increased to $10 million from $3 million in the fourth quarter 2025, primarily due to unfavorable movements in foreign currency exchange rates and lower interest income. Tax expense of $28 million compared to a tax benefit of $680 million in the fourth quarter 2025. The first quarter tax provision included $2 million of discrete tax expense, primarily related to the resolution of prior period tax matters. The fourth quarter tax provision included $691 million of tax benefit related to changes in deferred tax asset valuation allowances in certain operating jurisdictions and a $7 million discrete tax benefit primarily attributable to rig impairments. Adjusted for these items, tax expense increased to $26 million from $18 million in the fourth quarter due to a change in the jurisdictional mix of income. Capital expenditures decreased to $101 million from $106 million in the fourth quarter 2025. Cash and cash equivalents decreased to $578 million as of March 31, 2026, from $599 million as of December 31, 2025, primarily due to capital expenditures, partially offset by cash flow from operations. First Quarter Segment Review Floaters Revenues exclusive of reimbursable items decreased to $193 million from $255 million in the fourth quarter 2025, primarily due to VALARIS DS-17, which underwent contract preparation activities for most of the first quarter prior to commencing a new contract in late March, as well as VALARIS DPS-1 and MS-1, which completed contracts mid-fourth quarter without follow-on work. Contract drilling expenses exclusive of reimbursable items decreased to $151 million from $198 million in the fourth quarter 2025, primarily due to cost reductions associated with warm stacking VALARIS DPS-1 and MS-1, as well as the deferral of contract preparation costs for certain drillships that are restarting operations this year. Jackups Revenues exclusive of reimbursable items decreased to $196 million from $209 million in the fourth quarter 2025, primarily due to fewer operating days for VALARIS 106, which had an idle period after completing a contract early in the first quarter, and a lower day rate for VALARIS 123, which commenced a short-term accommodation services contract early in the first quarter. Contract drilling expenses exclusive of reimbursable items increased to $129 million from $121 million in the fourth quarter 2025, primarily due to incremental cost to maintain insurance coverage for war-related risks for jackups that Valaris operates in the Middle East. ARO Drilling Revenues decreased to $127 million from $140 million in the fourth quarter 2025, primarily due to more out of service time related to planned shipyard projects for certain rigs, including VALARIS 116 and 250. This was partially offset by more operating days for VALARIS 76, which commenced a contract late in the fourth quarter. Contract drilling expenses decreased to $75 million from $87 million in the fourth quarter, primarily due to lower operating costs for rigs that were undergoing shipyard projects, partially offset by higher operating costs for VALARIS 76. Other Revenues exclusive of reimbursable items increased to $42 million from $38 million in the fourth quarter 2025, primarily due to higher bareboat charter revenues from rigs leased to ARO, resulting from more operating days for VALARIS 76, partially offset by fewer operating days for VALARIS 116 and 250. Contract drilling expenses exclusive of reimbursable items increased to $23 million from $21 million in the fourth quarter, primarily due to incremental cost to maintain insurance coverage for war-related risks for VALARIS 116 and 250, which are undergoing shipyard projects in the Middle East prior to recommencing long-term bareboat charters with ARO. Conference Call In connection with the pending business combination with Transocean Ltd., announced on February 9, 2026, Valaris does not intend to hold future earnings conference calls or provide updates to forward-looking guidance. About Valaris Limited Valaris Limited (NYSE: VAL) is an industry leader in offshore drilling services across all water depths and geographies. Operating a high-quality rig fleet of ultra-deepwater drillships, versatile semisubmersibles, and modern shallow-water jackups, Valaris has experience operating in nearly every major offshore basin. Valaris maintains an unwavering commitment to safety, operational excellence, and customer satisfaction, with a focus on technology and innovation. Valaris Limited is a Bermuda exempted company limited by shares (Bermuda No. 56245). To learn more, visit the Valaris website at www.valaris.com. Forward-Looking Statements Statements contained in this press release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include words or phrases such as "anticipate," "believe," "estimate," "expect," "intend," "likely," "outlook," "plan," "project," "could," "may," "might," "should," "will" and similar words and specifically include statements regarding expected financial performance; expected utilization, day rates, revenues, operating expenses, cash flows, contract status, terms and duration, contract backlog, capital expenditures, insurance, financing and funding; the offshore drilling market, including supply and demand, customer drilling programs and the attainment of requisite permits for such programs, stacking of rigs, effects of new rigs on the market and effect of the volatility of commodity prices; expected work commitments, awards, contracts and letters of intent; scheduled delivery dates for rigs; performance and expected benefits of our joint ventures, including our joint venture with Saudi Aramco; timing of the delivery of the Saudi Aramco Rowan Offshore Drilling Company ("ARO") newbuild rigs and the timing of additional ARO newbuild orders; the availability, delivery, mobilization, contract commencement, availability, relocation or other movement of rigs and the timing thereof; rig reactivations; suitability of rigs for future contracts; divestitures of assets; general economic, market, business and industry conditions, trends and outlook; general political conditions, including political tensions, conflicts and war; cybersecurity attacks and threats; uncertainty around the use and impacts of artificial intelligence applications; impacts and effects of public health crises, pandemics and epidemics; future operations; ability to renew expiring contracts or obtain new contracts; increasing regulatory complexity; targets, progress, plans and goals related to sustainability matters; the outcome of tax disputes; assessments and settlements; and expense management. The forward-looking statements contained in this press release are subject to numerous risks, uncertainties and assumptions that may cause actual results to vary materially from those indicated, including risks associated with the pending transaction with Transocean Ltd., including, among others, the completion of the pending transaction on the anticipated terms and timing, or at all, the risk that disruptions from the transaction will harm our business, including current plans and operations, the diversion of management's time and attention from ordinary course operations to completion of the pending transaction and certain restrictions during the pendency of the transaction that may impact our business; cancellation, suspension, renegotiation or termination of drilling contracts and programs; our ability to obtain financing, service our debt, fund capital expenditures and pursue other business opportunities; adequacy of sources of liquidity for us and our customers; future share repurchases; actions by regulatory authorities, or other third parties; actions by our security holders; internal control risk; commodity price fluctuations and volatility, customer demand, loss of a significant customer or customer contract, downtime and other risks associated with offshore rig operations; adverse weather, including hurricanes; changes in worldwide rig supply; and demand, competition and technology; supply chain and logistics challenges; consumer preferences for alternative fuels and forecasts or expectations regarding the global energy transition; increased scrutiny of our sustainability targets, initiatives and reporting and our ability to achieve such targets or initiatives; changes in customer strategy; future levels of offshore drilling activity; governmental action, civil unrest and political and economic uncertainties, including recessions, inflation, volatility affecting financial markets and the banking system, changing tariff policies, trade disputes, and adverse changes in the level of international trade activity; terrorism, piracy and military action (including conflicts in the Middle East and potential disruptions to key shipping lanes such as the Strait of Hormuz); risks inherent to shipyard upgrade, repair, maintenance, enhancement or rig reactivation; our ability to enter into, and the terms of, future drilling contracts; suitability of rigs for future contracts; the cancellation of letters of intent or letters of award or any failure to execute definitive contracts following announcements of letters of intent, letters of award or other expected work commitments; the outcome of litigation, legal proceedings, investigations or other claims or contract disputes; governmental regulatory, legislative and permitting requirements affecting drilling operations; our ability to attract and retain skilled personnel on commercially reasonable terms; the use of artificial intelligence by us, third-party service providers or our competitors; environmental or other liabilities, risks or losses; compliance with our debt agreements and debt restrictions that may limit our liquidity and flexibility, including in any return of capital plans; cybersecurity risks and threats; and changes in foreign currency exchange rates. In addition to the numerous factors described above, you should also carefully read and consider "Item 1A. Risk Factors" in Part I and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II of our most recent annual report on Form 10-K, which is available on the Securities and Exchange Commission's website at www.sec.gov or on the Investor Relations section of our website at www.valaris.com. Each forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to update or revise any forward-looking statements, except as required by law. Non-GAAP Financial Measures (Unaudited) To supplement Valaris’ condensed consolidated financial statements presented on a GAAP basis, this press release provides investors with Adjusted EBITDA, which is a non-GAAP measure. Valaris defines "Adjusted EBITDA" as net income (loss) before income tax expense, interest expense, other (income) expense, depreciation expense, other operating (income) loss, (gain) loss on sale of property, merger and integration expenses, and equity in (earnings) losses of ARO. Adjusted EBITDA is a non-GAAP measure that our management uses to facilitate period-to-period comparisons of our core operating performance and to evaluate our long-term financial performance against that of our peers. We believe that this measure is useful to investors and analysts in allowing for greater transparency of our core operating performance and makes it easier to compare our results with those of other companies within our industry. Adjusted EBITDA should not be considered (a) in isolation of, or as a substitute for, net income (loss), (b) as an indication of cash flows from operating activities, or (c) as a measure of liquidity. Adjusted EBITDA may not be comparable to other similarly titled measures reported by other companies. Valaris defines "ARO Adjusted EBITDA" as ARO's net income (loss) before income tax expense, other expense, net, and depreciation expense. ARO Adjusted EBITDA is a non-GAAP measure that our management uses to facilitate period-to-period comparisons of ARO's core operating performance and to evaluate ARO's long-term financial performance against that of ARO's peers. We believe that this measure is useful to investors and analysts in allowing for greater transparency of ARO's core operating performance and makes it easier to compare ARO's results with those of other companies within ARO's industry. ARO Adjusted EBITDA should not be considered (a) in isolation of, or as a substitute for, net income (loss), (b) as an indication of cash flows from operating activities, or (c) as a measure of liquidity. ARO Adjusted EBITDA may not be comparable to other similarly titled measures reported by other companies. Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures prepared in accordance with GAAP. Reconciliation of Net Income (Loss) to Adjusted EBITDA A reconciliation of net income (loss) as reported to Adjusted EBITDA is included in the tables below (in millions): A reconciliation of net income (loss) as reported to ARO Adjusted EBITDA is included in the tables below (in millions): Reconciliation of Net Income (Loss) to Adjusted EBITDA View source version on businesswire.com: https://www.businesswire.com/news/home/20260501947391/en/ Contacts Investor & Media Contact: Tim Richardson Director - Investor Relations +1-713-979-4619

Image source: The Motley Fool. Thursday, October 30, 2025 at 10 a.m. ET President and Chief Executive Officer — Anton Dibowitz Senior Vice President and Chief Commercial Officer — Matt Lyne Senior Vice President and Chief Financial Officer — Christopher Weber Vice President, Investor Relations — Nick Georgas Anton Dibowitz: Thanks, Nick, and good morning and afternoon to everyone. I'll begin today's call with a summary of our third quarter performance and highlight our recent commercial achievements. I'll then provide an update on the offshore drilling market before discussing how our continued focus on operational excellence, commercial execution and disciplined cost and fleet management is driving long-term value for shareholders. I'll then turn the call over to Matt, who will provide additional detail on our contracting activity and the broader floater and jack-up markets. After that, Chris will walk through our financial results and guidance, and I'll finish with a few closing remarks. To begin, I want to highlight a few key points. First, I want to thank the entire Valaris team for continuing to deliver safe and efficient operations. This solid operational performance contributed to another strong quarter of financial results with meaningful EBITDA and free cash flow generation. Second, we continue to execute our commercial strategy, having recently secured an attractive contract for VALARIS DS-12 with BP Offshore Egypt. With this award, all 4 of our drillships with near-term availability are now contracted for work beginning next year. Third, despite near-term commodity price uncertainty, demand for offshore drilling services is developing as we expected. We continue to see a robust pipeline of deepwater opportunities for our high-specification fleet, and we are in advanced customer discussions for our drillships scheduled to complete contracts in the second half of 2026. In summary, we remain focused on delivering outstanding operational performance, executing on our commercial strategy and prudently managing our costs and fleet. By staying disciplined and focused on these priorities, Valaris is well positioned to deliver long-term value for our shareholders. Moving to operations. Delivering safe and efficient operations is always our top priority. It protects our people, strengthens relationships with our customers and serves as the foundation for everything we do. Our teams once again delivered solid operational performance, achieving fleet-wide revenue efficiency of 95% in the third quarter. This execution helped deliver another quarter of strong financial results, including adjusted EBITDA of $163 million and adjusted free cash flow of $237 million. In addition, we repurchased $75 million of shares during the quarter, demonstrating our commitment to returning capital to shareholders. Several rigs reached notable safety milestones during the quarter. VALARIS Stavanger marked an impressive 4 years recordable-free, a remarkable achievement that reflects the crew's commitment to safety and the strength of their leadership. In addition, 7 other rigs, floaters VALARIS DS-12, DS-18 and DPS-1, along with jack-ups VALARIS 92, 123, 247 and 249, each achieved 1-year recordable-free. Congratulations to all involved on these outstanding results. We were also proud to be recognized by the Center for Offshore Safety for the third consecutive year, most recently for our Video After Action Review initiative, reflecting both the strength of our safety culture and our commitment to continuous improvement through innovation. We continue to execute our commercial strategy. This is supported by a solid operational performance since many of our recent contract awards have come from existing customers, reflecting the strength of our relationships and the confidence they place in us to deliver safe and efficient operations. Great example is our recent contract for VALARIS DS-12, which will return to Egypt with BP, building on our previous campaign that included drilling the successful El King 2 and El Fayum 5 exploration wells earlier this year. Egypt continues to make meaningful progress in attracting investment from IOCs with several majors awarded offshore acreage in a licensing round earlier this year. Valaris has a long and successful history operating offshore Egypt, spanning roughly 2 decades of drilling programs, including 7 years for BP. We're excited about this upcoming campaign and the prospect for continued activity offshore Egypt in the years ahead. At the start of the year, we outlined our commercial focus on securing attractive contracts to bookend the white space for our drillships with near-term availability. And we have accomplished this objective as these 4 rigs are now contracted for work beginning next year. This is a fantastic achievement by our commercial team and everyone across the organization who played a role in making it happen. Turning now to the broader macro environments in the offshore drilling market. The long-term outlook for our industry is becoming increasingly constructive. There is a growing consensus that today's near-term oil supply surplus will give way to a structurally tighter market later in the decade as a result of historic underinvestment and slowing non-OPEC production growth. Our customers continue to emphasize the need for sustained investment in oil and gas, particularly in offshore developments that provide secure, reliable and affordable energy supply. The IEA recently highlighted that nearly 90% of global upstream spending is required just to offset natural field declines, underscoring how much investment is needed to simply maintain existing production. Without continued investment, the IEA estimates global oil production would fall by 8% per year on average over the next decade, equivalent to losing more than the annual output of Brazil and Norway each year over the same time frame. Demand for offshore drilling continues to unfold as we expected, with customers increasingly looking to offshore projects, particularly deepwater, which offers large accessible resource potential, compelling project economics and comparatively lower carbon emissions to meet future energy needs. Even with some near-term commodity price uncertainty, customers are moving forward with long-cycle offshore developments, and we anticipate meaningful growth in deepwater project sanctioning over the next few years as customers pursue greenfield and brownfield developments as well as exploration. Importantly, most of these projects are expected to be economically viable well below current oil prices. According to Rystad, approximately 70% of deepwater spending expected to be sanctioned over the next 3 years is tied to programs with breakeven prices below $50 per barrel compared to a 5-year forward price above $65 per barrel. This reinforces our expectation that the floater opportunities we've been tracking will continue converting to contracts. And based on our ongoing conversations with customers, we anticipate additional awards for Valaris and the broader industry in the coming months. We continue to expect that utilization for the global drillship fleet will trough late this year or early next year before improving in the second half of 2026 as rigs begin new contracts. And we anticipate seventh-generation drillships will exit 2026 with utilization levels around 90% Customers continue to prefer the most technically capable and efficient assets, which aligns well with our high-specification drillship fleet with 12 of our 13 ships being seventh- generation units, the highest concentration in the industry. Seventh-generation drillships have historically enjoyed a utilization and day rate advantage, and we expect this trend will continue. We have strategically positioned our assets with customers in basins where we see sustained long-term demand, and we believe that this targeted commercial approach will allow us to maintain more consistent utilization over time. Turning to jack-ups. Shallow water demand remains robust with global utilization around 90%, driven primarily by national oil companies focused on energy security and infrastructure development. Recently, Saudi Aramco has issued notices calling back several suspended rigs to resume operations next year, which we expect will further support the supply and demand balance of the global jack-up fleet. Our versatile jack-up fleet continues to be a significant and reliable driver of earnings with EBITDA from the segment increasing year-over-year, driven by more operating days and higher average day rates. This reflects our strategic focus on markets where we hold strong positions, such as our market-leading position in the North Sea, in Saudi Arabia through our rigs leased to ARO and in niche markets that require high-specification assets like Trinidad and Australia. Turning to our broader fleet management strategy, we remain focused on maintaining our high-quality and efficient asset base while prudently managing our costs and fleet. This includes tightly managing expenses between contracts, selling assets when we can achieve attractive prices and retiring rigs when their expected future economic benefit no longer justifies their associated costs. This focus was recently demonstrated by the highly accretive sale of 27-year-old jack-up VALARIS 247, which we closed during the quarter for $108 million in cash. Consistent with our disciplined approach to cost management, following completion of their current programs, we plan to mobilize VALARIS MS-1 and DPS-1 to Malaysia, where we will quickly reduce costs by warm stacking both rigs while we evaluate future opportunities. Before handing over to Matt, I'd like to briefly recap a few key points about the market and our strategy. Our customers continue to highlight the need for ongoing investment in oil and gas, particularly in offshore developments that offer secure, reliable and affordable energy supply. Demand for offshore drilling is developing as we expected, and customers are increasingly turning to offshore projects to support future energy demand. We're well positioned to continue executing our commercial strategy by securing attractive floater contracts supported by our global scale and high-spec fleet. We're in advanced discussions with customers regarding opportunities for rigs scheduled to complete contracts in the second half of 2026, and we will continue to pursue gap-fill programs in the first half of next year. Against this positive backdrop, we remain focused on 3 strategic priorities: delivering outstanding operational performance, executing our commercial strategy and prudently managing our costs and fleet. By staying disciplined and focused on these priorities, Valaris is well positioned to deliver long-term value for shareholders. With that, I'll now hand the call over to Matt. Matt Lyne: Thanks, Anton, and good morning and afternoon, everyone. I'll begin with a summary of our recent contract awards before providing updates on the major floater and jack-up markets where we operate. Since our second quarter call, we've secured new contracts and extensions, adding nearly $200 million to our contract backlog. And we are in advanced customer discussions on several contract opportunities for both drillships and jack-ups that we expect to conclude before year-end. Starting with drillships, year-to-date, we've added approximately $1.4 billion of backlog for our drillship fleet, representing 9 years of total contract duration. Most recently, we've secured a 5-well contract for VALARIS DS-12 with BP offshore Egypt. The contract is expected to commence in mid-second quarter 2026 with an estimated duration of 350 days and a total contract value of approximately $140 million. The contract also includes 3 option wells, which could extend the program to more than 2 years in total duration. Turning to jack-ups. We have secured more than 500 days of additional work in the North Sea, including contract extensions for the VALARIS Norway, 121 and 122 as well as a 4-month program for the 248, which helps bridge most of the gap between the SPS and the start of the next program in 2026. Fleet-wide, we've added over $2.2 billion in contracted revenue backlog year-to-date, significantly enhancing our contract coverage for 2026 and beyond. And current total backlog stands at $4.5 billion. Turning now to the major floater and jack-up regions where we operate. Consistent with last quarter, we are tracking more than 30 longer-term floater opportunities with planned start dates in 2026 and 2027, each with durations of a year or more. We continue to see programs we are tracking progress through the commercial process with long-term contracts typically awarded at least 9 months before their planned commencement. We expect to see further awards both for Valaris and our peers before year-end. Offshore Africa, including West Africa, East Africa and the Mediterranean, remains the most active region for future floater demand, representing roughly half of the long-term opportunities in our pipeline. Starting with Egypt, the country is experiencing declining output from mature fields and views new offshore exploration and development as key to satisfy growing domestic demand. The government has made meaningful progress attracting IOC investment with several majors awarded offshore blocks in a licensing round earlier this year, and we look forward to continuing our long history of operations offshore Egypt in the years ahead. Elsewhere in the Mediterranean, Cyprus is a potential bright spot with exploration and development programs anticipated in 2026 and 2027. Angola is facing a similar situation to Egypt, with production from mature fields declining, resulting in total production recently dropping below 1 million barrels per day for only the second time this decade. The Angolan government is focused on stabilizing production above this level by incentivizing both new exploration and brownfield development. We currently have the VALARIS DS-7 and DS-9 working offshore Angola with the DS-7 currently drilling an exploration well in Block 47 for Azule. Both rigs have delivered strong operational performance, positioning them well for follow-on work when their current contracts expire in the second half of 2026. Elsewhere in West Africa, we expect to see growth offshore Nigeria with 2 multiyear programs with IOCs presently in the tendering phase, one of which is expected to be awarded soon. Offshore Ivory Coast, Eni has issued a request for information for a long-term development program at the Baleine field that is expected to commence in 2027. Similarly, we anticipate incremental demand from Namibia, where TotalEnergies is expected to tender soon for a long-term development for its Venus project, potentially leading to several years of work for multiple rigs. Other operators are advancing plans for further exploration and potential development programs that could begin within the next couple of years. In Mozambique, Eni recently reached FID on its Coral North project and is tendering for a drillship to start work in the second half of 2026. Additional tenders for programs starting in 2027 with TotalEnergies and Exxon are expected in the coming months. Valaris has a long and successful track record offshore Africa. And we expect development activity around the continent will be the main driver of incremental floater demand over the next few years. With 5 of our high-specification drillships now contracted around the continent, we are well positioned to benefit from this growth. Moving to Brazil, we continue to expect that Petrobras' rig count remains stable. Petrobras also recently received an environmental license to drill an exploration well in the Equatorial Margin, an important step toward potential future development activity in this region, which lies adjacent to the prolific offshore basins of Guyana and Suriname. Beyond Petrobras, we also see opportunities with IOCs in Brazil, including Shell's Orca project, formerly known as Gato do Mato, which is nearing award. In addition, we expect that BP's Bumerangue discovery, which was drilled by VALARIS DS-15 will lead to future appraisal and development activity. Overall, we continue to see solid floater demand offshore Brazil and expect it remains the largest market for deepwater rigs. In the U.S. Gulf, customer demand remains healthy with several term extensions announced by our peers following the long-term Oxy contracts for VALARIS DS-16 and DS-18 that we announced in July. We were pleased to have secured these contracts as they provided 5 years of backlog, solidified our presence in the region and deepened our relationship with Oxy, who is a major leaseholder in the U.S. Gulf. We expect this market to remain fairly balanced with demand largely met by the existing supply of the rigs in the region. Outside of the Golden Triangle, we are tracking requirements for 7 drillships offshore India, Southeast Asia and Australia, representing more than 10 years of firm demand. This activity could draw additional supply away from the Golden Triangle as recently occurred with the drillship mobilizing to Indonesia after completing work offshore West Africa. Valaris MS-1 and DPS-1 are scheduled to complete contracts offshore Australia during the fourth quarter. We currently see no new work for these rigs in 2026 but continue to have discussions about potential opportunities in 2027 and beyond. In line with our disciplined fleet management approach, we plan to mobilize both rigs to Malaysia to be warm stacked while we evaluate these opportunities. Turning to jack-ups, current global marketed utilization remains steady at around 90%. We have strong and focused presence in strategic shallow water markets. This has helped us to achieve industry-leading contract coverage on our jack-up fleet with nearly 80% of available days of our active rigs contracted for 2026 and more than 60% contracted for 2027. In benign environments, we have open availability in 2026 for just 2 rigs, VALARIS 106 in Indonesia and VALARIS 107 in Australia. We are in advanced customer discussions for both rigs and expect to secure additional work soon. In the North Sea, recent awards have enhanced our contract coverage. We now have availability on just 2 of our jack-ups in the region during the first half of next year, and we are tracking a number of short-term opportunities that line up well with our limited availability during this time. Looking further ahead, we anticipate demand improves across the region in the second half of 2026 and into 2027. In the U.K., we see a range of opportunities that include gas drilling, plug and abandonment work, new energy and infrastructure projects, and we anticipate supply will largely meet demand. We expect activity in the Dutch sector will remain steady, keeping 4 rigs busy, and we see opportunities in Denmark for up to 2 rigs during 2026, representing an uptick in activity given no rigs are currently operating there. Our strong operational track record and long-standing customer relationships have supported our best-in-class utilization in the region over the past few years, and we continue to see multiple opportunities well suited for our rigs with availability in 2026. In summary, we are successfully executing our commercial strategy, having secured more than $2.2 billion in new backlog so far this year. We continue to engage constructively with customers on future programs, and our focus remains on building backlog through attractive contracts that will further strengthen our earnings and cash flow. I'll now hand the call over to Chris, who will take you through the financials. Christopher Weber: Thanks, Matt, and good morning and afternoon, everyone. In my prepared remarks today, I'll begin with an overview of our third quarter results, followed by our outlook for the fourth quarter. Starting with our third quarter results, total revenues were $596 million compared to $615 million in the prior quarter, primarily due to fewer operating days for our floater fleet as drillships VALARIS DS-15 and DS-18 completed contracts midway through the third quarter without immediate follow-on work. In addition, jack-up VALARIS 247 completed its contract in late July and was sold in August. These items are partially offset by more operating days for several rigs in the jack-up fleet. Adjusted EBITDA was $163 million compared to $201 million in the prior quarter. The decrease was primarily due to fewer operating days for our floater fleet and the $24 million nonrecurring benefit we recognized in the second quarter from a previously disclosed favorable arbitration outcome. Third quarter adjusted EBITDA exceeded our guidance range of $120 million to $140 million, primarily due to certain contracts running longer than previously anticipated, higher revenues from ARO leased rigs and lower support costs. Third quarter CapEx totaled $70 million, coming in below guidance due to timing as certain project spend has shifted to the fourth quarter. During the quarter, we generated $198 million of cash flow from operations and received just over $100 million in net proceeds from the sale of VALARIS 247. After deducting capital expenditures, this resulted in $237 million of adjusted free cash flow. We repurchased $75 million of shares in the third quarter at an average price of $49 per share. We ended the quarter with $676 million of cash and cash equivalents. Moving now to our fourth quarter outlook, we expect total revenues in the range of $495 million to $515 million, down from $596 million in the third quarter. The anticipated decrease is primarily due to fewer operating days across the fleet. Within our floater fleet, drillships VALARIS DS-15 and DS-18 are currently idle after completing contracts during the third quarter. and semisubmersible VALARIS DPS-1 and MS-1 are both expected to complete contracts offshore Australia before year-end. For our jack-up fleet, VALARIS 247 was sold during the third quarter and VALARIS 120 and 248 are expected to have fewer operating days due to a mobilization between jobs for the 120 and out-of-service time for the 248 SPS. We also expect lower revenues from ARO leased rigs as VALARIS 116 and 250 begin shipyard projects. We expect contract drilling expense of $390 million to $405 million compared to $406 million in the third quarter. The decrease is primarily due to cost reduction on rigs that have completed contracts without immediate follow-on work. Both revenue and contract drilling expense in the fourth quarter are expected to include $25 million to $30 million of reimbursable items. We anticipate G&A expense will be approximately $27 million, in line with the prior quarter as we continue to prudently manage our cost structure. Fourth quarter adjusted EBITDA is expected to be $70 million to $90 million. Finally, we expect CapEx of $145 million to $165 million, which is higher than prior quarters due to certain project spend shifting from earlier in the year. The midpoint of our fourth quarter guidance implies expected full year adjusted EBITDA of approximately $625 million, which is roughly $40 million above the midpoint of guidance we provided on our second quarter call. This increase is primarily due to our outperformance in the third quarter as well as an expected improvement in our fourth quarter outlook, mostly driven by more operating days for the jack-up fleet. The midpoint of our fourth quarter CapEx guidance implies expected full year CapEx of approximately $390 million, roughly in line with the midpoint of our prior guidance. As a reminder, we expect to receive approximately $70 million in upfront payments from customers this year to reimburse certain contract-specific upgrades. This concludes my review of our financial results and guidance. I'll now hand the call back to Anton for some closing remarks. Anton Dibowitz: Thanks, Chris. Before we open the line for questions, I'd like to recap a few key points from today's prepared remarks. First, I want to reiterate my appreciation to the entire Valaris team for continuing to deliver safe and efficient operations, which contributed to another strong quarter of financial results with meaningful EBITDA and free cash flow generation. Second, we continue to execute our commercial strategy, and as a result, all 4 of our drillships with near-term availability are now contracted for work beginning next year. Third, demand for offshore drilling services is developing as we expected. We continue to see a robust pipeline of deepwater opportunities for our high-specification fleet, and we're in advanced customer discussions for our drillships scheduled to complete contracts in the second half of 2026. In summary, we continue to focus on delivering outstanding operational performance, executing our commercial strategy and prudently managing our costs and fleet. By staying disciplined and focused on these priorities, Valaris is well positioned to deliver long-term value for shareholders. We thank our employees for their focus and dedication and our customers and investors for their continued support. That concludes our prepared remarks. Operator, please open the line for questions. Operator: [Operator Instructions] Our first question today comes from Scott Gruber from Citigroup. Scott Gruber: So, it was good to see the repurchases this quarter. I'm curious about your appetite moving forward. Looking at consensus, there isn't a forecast for much free cash next year as we transition to better times. But you do have $660 million of cash on the balance sheet. Can you speak to an appetite to use that cash to buy back additional shares now ahead of the potential recovery in late '26 and '27? Christopher Weber: Yes, Scott, this is Chris. One, we remain committed to returning capital to shareholders. We executed the $75 million of repurchases in the quarter. We're excited about that. Reflects our confidence in the market and the outlook. But we've always said that our repurchases aren't necessarily going to be linear, not in a straight line, and we're going to be opportunistic, and that's what you saw this quarter. As we move forward, we'll see how the year progresses, what flexibility that provides for additional share repurchases, but excited what we were able to execute this quarter. Scott Gruber: What's your level of cash that you need to run the business? What's kind of a minimum cash balance for working capital purposes? Christopher Weber: Yes. I mean from a minimum cash perspective, I would say around $200 million to run the business. And where we hold cash in excess of that is just really with regards to kind of what are we seeing in the market, what's the cash flow profile of our business going forward and then those sort of things. Scott Gruber: Great. And then if I could sneak one more in. There's been a discussion around renewed appetite for exploration on various conference calls this quarter. Just wondering your perspective, in your conversations with customers, is there a tangible desire to increase exploration activity here in the years ahead? Are those conversations material? Or is it kind of a side conversation at this point? Anton Dibowitz: This is Anton. I'll take it. Look, there's always some exploration going on. Even in a lot of development programs that we've been drilling historically, customers will slot in an exploration well here or there. But we do see an increase in exploration discussions. And that's based on the necessity. The consensus is that we're going to need additional developments in order to meet the world's energy needs as we head towards the end of the decade. And in order to get those developments, our customers need to explore. So, I think it's a simple cause and effect. I think it's great for the market that there is additional exploration or increase in exploration activity expected from the various prognosticators in the market, also from the discussions we're having with our customers, and I think it portends well for where the market is going. Operator: Our next question comes from Greg Lewis from BTIG. Gregory Lewis: Anton, I was hoping you could elaborate maybe a little bit more on Scott's question about shareholder returns. We saw the sale of the rig. That was obviously a nice profit. Cash flow was pretty good, really good. Is there any kind of way to think about -- you're going to have opportunities to sell rigs, some of the noncore rigs in the future. Balance sheet is obviously strong. Is that kind of a -- should we think about asset sales as a mechanism to drive some of this return of cash to shareholders? Or is it going to be more focused on the operations of the business or maybe a little bit of both? Anton Dibowitz: Look, I'd start -- it's going to be focused on the operations of the business. I mean I want to first take a step back and say, we are committed to returning our free cash flow, sustained free cash flow to shareholders unless there's clearly a better or more accretive use for it. I think we've demonstrated that. Part of cost and discipline and fleet management comes to when there are opportunities like we had with the 247, a 27-year-old rig, and we can get a highly attractive price for it, it makes sense for us to divest that asset, and that obviously increases our financial flexibility. But at its base, our capital return needs to be driven by delivering operational cash flow. We are working through this white space period. So, Chris was asked the question before, when we understand and have these rigs, and we fully expect that our 10 active ships will be all working, exiting '26 under contract that will, again, underwrite our ability and flexibility as far as it comes to capital return. So, in summary -- let me take a step back and just summarize. It needs to be driven by operational delivery of operations and sustained earnings and the ability to sell assets when there are attractive opportunities, it is just opportunistic over and above that. Gregory Lewis: Okay. Great. And then the other question I had was around some of the recent term deals you did that have that MPD additional services. Kind of curious, it seems like the market ebbs and flows between MPD being built into the price versus MPD being kind of like a menu item. In the event that it's a menu item, is there any way to kind of -- knowing that every well is different, every customer is different, is there any kind of rough estimate how we should be thinking about how much of the time maybe -- if there is MPD as an add-on service, how much of the time should we be thinking about that service being used? Anton Dibowitz: It's very -- I'd love to give you an easy answer, but it is very, very customer dependent. It depends what sort of drilling they're doing. So, it is contract specific, well specific, is it a development? So, it's hard to -- Matt, I don't know if you want to. Matt Lyne: Yes. I think Anton hit the nail on the head that each customer is so different, so there's no large rule. But I think you can assume, if you're just running general analysis, somewhere between 40% to 50% utilization. Operator: Our next question comes from Eddie Kim from Barclays. Eddie Kim: Just a bigger picture question here. You reiterated your expectation for seventh-gen drillships exiting 2026 at utilization around 90%. At the same time, we have seen a few day rates below $400,000 a day that DS-12 included in that, though I know that Egypt is a lower OpEx environment for you guys. But some investor concern around maybe some more day rate prints below $400,000. First, do you think those are coming? And second, how is that impacting your view on activity inflection higher in the back part of next year? It seems that it isn't, but just wanted to get your thoughts and your confidence level around that. Anton Dibowitz: Okay. A few questions in there. I think this is how I describe it. We believe the market is playing out as we expected. I think that day rates for high-spec ships have largely troughed in the high 300s, kind of low to mid -400 range. As an industry, we're working through a period of white space and then there are a number of tenders that are in progress right now, and you'll probably see some additional prints contract awards in that range as those contracts work through the tender process. But we continue to expect that utilization will trough towards the end of this year, early next year and then a recovery beyond that, exiting as an industry, high-spec ships above -- at or above 90% at the end of '26, and inevitably, day rates follow utilization. But for now, I think day rates have troughed as we see it for the cycle in the kind of high 300s, low to mid-400 range. Eddie Kim: Great. Great. My follow-up is just on your rigs coming off contract next year. You have absorbed a lot of white space with your recent contract awards. But the DS-9 and the DS-7 are off contract mid- to late next year, both in Angola. And based on your, I mean, constructive outlook in Angola and West Africa in general, it feels like it's likely that those could get extended without any idle time between contracts. Just any thoughts there? And then [indiscernible] DS-15, DS-18 have long-term contracts starting end of next year, but are idle today. What's the likelihood that you'll be able to secure some short-term gap-fill work for those before long-term contracts commence? Anton Dibowitz: Matt, do you want to start on the gap-fill and then I'll come across as how we view them. Matt Lyne: Sure. I mean I think -- well, first off, Angola on the 9 and the 7, as I mentioned in my prepared remarks, you're seeing a decrease in production, so I think the government is working closely with the IOCs to incentivize drilling. So, I think your read is right that we see positive discussions regarding the future contracting opportunities for those rigs. And equally, they have performed extremely well, which just further benefits the likelihood that they'll have strong potential for extensions. From a gap-fill perspective, we've done a great job of bookending the near-term availability on our assets. And while there are some short-term opportunities available in the market, probably not enough to fill all the rigs that have white space right now, but we continue to chase work that fits the longer-term opportunities that we've secured. Anton Dibowitz: I think Matt covered it well. Our expectation is that high-spec rigs will exit '26, 90% plus utilization. Our team has done a fantastic job of delivering our commercial strategy to date, and I expect them to continue to do that. No pressure, Matt. But we expect that all 10 of our active drillships will exit '26 on contract and working. Operator: Our next question comes from Doug Becker from Capital One. Doug Becker: Valaris has a couple of rigs with Petrobras in Brazil. I want to get a sense for the focus of recent discussions with them to help reduce costs. Anton Dibowitz: Matt, do you want to? Matt Lyne: Sure. I mean I think it's been widely reported that Petrobras are looking across their entire value supply chain for potential savings in 2026. So, while it's early days in discussions amongst all of their services, we've seen these discussions materialize before. So, I think what's important is recognizing that they want to maintain their production targets, which means they are likely to maintain a fleet of similar size over the long term, which is positive for us. And so, while constructive discussions continue, it's too soon to kind of discuss the specifics around it. Anton Dibowitz: I think Matt said it really well. We expect Petrobras' rig fleet to remain stable. They have clear goals on what their production, and that's going to mean they need to maintain a significant and the most significant drillship fleet in the world. And the discussions are very early days and very, very constructive. So, we'll just have to see how it plays out across the industry. Doug Becker: Definitely sounds encouraging. Maybe switching to Saudi Arabia. You mentioned Aramco has issued notices calling back several suspended rigs. It sounds like there's also been a recent tender. Do you think Saudi Arabia is a source of incremental demand, incremental work for Valaris next year? Anton Dibowitz: Really positive to see Saudi Aramco reactivating and calling back suspended rigs. So, I think when you look at a global utilization of the jack-up market hovering around 90%, it just adds further benefit to that market. So, we see that as a really positive data point. On incremental demand, there are -- there is potential for that. And with some idle capacity sitting over in the Middle East, we continue to monitor that closely together with our joint venture, which operates in Saudi Arabia. Operator: And our next question comes from [ Josh Jain ] from Daniel Energy Partners. Unknown Analyst: Those in the market generally seem in unison with respect to a recovery in deepwater in the second half of '26. And I think the recent contract announcements largely support that. Maybe you could just talk a bit more about where geographically do you have the most confidence that rig counts will hold or increase and which regions do you see as having potential risk if we're in uncertain crude environment? Anton Dibowitz: Matt, do you want to give Josh [indiscernible]? Matt Lyne: Sure. I mean -- I think we've touched a few of these in some of the answers already given in the prepared remarks. But I think we largely see South America, Brazil holding flat, maintaining their fleet size, which is also the largest floater market. So that's a very positive sign. Incremental demand in Africa. We've mentioned the FID of Eni's project in Mozambique and then there's some strong signs of that force majeure being lifted for 2 other major IOCs with Exxon and Total. So some positive work in East Africa and obviously announcing some work in Egypt with decreasing production there, trying to turn that around is showing some other -- some unique opportunities in the Med and West Africa. So, what we have seen though, is some rigs shifting locations as well with Asia carrying a number of opportunities without sufficient supply sitting over there and customers really continuing the trend of focusing on higher-spec assets, you could see some migration from the Golden Triangle to service some of the opportunities in Asia. Roughly half that -- sorry, let me just go -- roughly half -- take a step back from that, roughly half that incremental demand, a big driver of incremental demand will be Africa and Africa in general. There is about 25% of that were coming from beyond the Golden Triangle and fairly stable in the U.S. Gulf and South America. Unknown Analyst: Great. Thanks. And then I wanted to pry just a little bit on Aramco and Doug hit it with his last question. But with -- I guess what's changed a little bit over the last 18 months is I feel like Saudi has definitely gotten a bit more aggressive with respect to their production goals that they're talking about hitting over the next 6, 12, 24 months. Maybe you could just offer a little bit more insight and maybe not into '26, but just longer term, how many rigs do you feel like they ultimately could be adding back over the next 3 years, just given the volatility that we've seen and to ultimately meet their lofty production goals? Anton Dibowitz: I think what I'd focus on in the recent news out of people talking about rigs going back to Saudi Aramco, Saudi Aramco's desire to bring rigs back into production is the fact that in the global fleet, high-spec jack-up utilization is 90% above, 90% and above. So, the market has held in there. The talk is in the near term, kind of mid- to high single digits plus potential for additional tenders beyond that. And every rig that goes back into their fleet is further supportive of the global market. So overall, the jack-up market, high-spec jack-up market is fairly healthy. And I think just to the extent they choose to bring rigs back in order to meet their production targets, it's just further support for a market that's already attractive. Operator: And ladies and gentlemen, at this time, we'll be ending today's question-and-answer session. I'd like to turn the floor back over to Nick Georgas for any closing remarks. Nick Georgas: Thanks, Jamie, and thank you to everyone on today's call for your interest in Valaris. We look forward to speaking with you again when we report our fourth quarter 2025 results. Have a great rest of your day. Operator: And with that, we'll be concluding today's conference call and presentation. We thank you for joining. You may now disconnect your lines. Before you buy stock in Valaris, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Valaris wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $496,473!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,216,605!* Now, it’s worth noting Stock Advisor’s total average return is 968% — a market-crushing outperformance compared to 202% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of May 4, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Valaris (VAL) Q3 2025 Earnings Call Transcript was originally published by The Motley Fool

The market expects Helmerich & Payne (HP) to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended March 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates. The earnings report, which is expected to be released on May 6, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower. While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise. This oil and gas well-drilling contractor is expected to post quarterly loss of $0.09 per share in its upcoming report, which represents a year-over-year change of -550%. Revenues are expected to be $946.15 million, down 6.9% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 1.01% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Helmerich & Payne, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +13.33%. On the other hand, the stock currently carries a Zacks Rank of #3. So, this combination indicates that Helmerich & Payne will most likely beat the consensus EPS estimate. While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Helmerich & Payne would post earnings of $0.12 per share when it actually produced a loss of -$0.15, delivering a surprise of -225.00%. Over the last four quarters, the company has beaten consensus EPS estimates just once. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Helmerich & Payne appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Valaris Limited (VAL), another stock in the Zacks Oil and Gas - Drilling industry, is expected to report loss per share of $0.05 for the quarter ended March 2026. This estimate points to a year-over-year change of +90.6%. Revenues for the quarter are expected to be $437.85 million, down 29.5% from the year-ago quarter. The consensus EPS estimate for Valaris has been revised 10.9% lower over the last 30 days to the current level. However, an equal Most Accurate Estimate has resulted in an Earnings ESP of 0.00%. This Earnings ESP, combined with its Zacks Rank #2 (Buy), makes it difficult to conclusively predict that Valaris will beat the consensus EPS estimate. Over the last four quarters, the company surpassed consensus EPS estimates three times. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. 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 Helmerich & Payne, Inc. (HP) : Free Stock Analysis Report Valaris Limited (VAL) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Wall Street expects a year-over-year increase in earnings on lower revenues when Valaris Limited (VAL) reports results for the quarter ended March 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. The earnings report, which is expected to be released on May 4, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower. While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise. This company is expected to post quarterly loss of $0.05 per share in its upcoming report, which represents a year-over-year change of +90.6%. Revenues are expected to be $437.85 million, down 29.5% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 11.96% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Valaris, the Most Accurate Estimate is the same as the Zacks Consensus Estimate, suggesting that there are no recent analyst views which differ from what have been considered to derive the consensus estimate. This has resulted in an Earnings ESP of 0%. On the other hand, the stock currently carries a Zacks Rank of #2. So, this combination makes it difficult to conclusively predict that Valaris will beat the consensus EPS estimate. Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Valaris would post earnings of $0.51 per share when it actually produced earnings of $0.79, delivering a surprise of +54.90%. Over the last four quarters, the company has beaten consensus EPS estimates three times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Valaris doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. 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 Valaris Limited (VAL) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research