Shares of HF Sinclair Corporation (NYSE: DINO) surged 5.02% in pre-market trading on Thursday after the independent U.S. refiner reported a smaller-than-expected loss for the first quarter of 2025, buoyed by improving refining margins.

The Dallas, Texas-based company posted an adjusted loss of $0.27 per share for the quarter ended March 31, beating the average analyst estimate of a $0.44 per share loss, according to data compiled by LSEG. While this represents a significant decrease from earnings of $0.71 per share in the same period last year, the results signal a sequential improvement in the challenging refining environment.

HF Sinclair reported quarterly sales of $6.37 billion, which fell short of the $6.67 billion expected by analysts but demonstrated the company's resilience in a difficult market. The company's adjusted EBITDA came in at $201 million, substantially surpassing the consensus estimate of $135.5 million.

"Our first quarter results reflect a sequential improvement in refining margins, which helped mitigate the impact of ongoing macroeconomic headwinds," said Atanas Atanasov, HF Sinclair's Chief Financial Officer, during a conference call with analysts. The company also announced plans to operate its seven refineries at up to 93% of their combined capacity of 678,000 barrels per day in the second quarter of 2025, indicating optimism for near-term market conditions.

Investors responded positively to the earnings beat and the company's operational outlook, driving the stock higher in pre-market trading. The market reaction suggests that despite the year-over-year decline in performance, HF Sinclair is navigating the current market challenges better than anticipated, positioning itself for potential upside as refining margins continue to improve.