Shares of semiconductor equipment companies are strong this morning after peer ASML (ASML) reported fourth quarter earnings and revenue that were ahead of expectations, as customers looked for early delivery of equipment to meet high demand expectations.

Q4 RESULTS: The Dutch-based semiconductor equipment maker reported Q4 revenue of EUR 2.56B versus a consensus estimate of EUR 2.15B. The company also reported a gross margin rate of 45.2%, ahead of estimates. Earnings per share for the quarter was EUR 1.49 versus EUR 1.22 in the year-ago quarter. ASML sees Q1 revenue of EUR 2.2B, lower than the average of analyst estimates, but sees strength in the second half of the year. “Due to industry strength, some customers requested earlier shipments of their lithography systems, which we were able to accommodate. Earlier-than-expected revenue recognition of two Extreme Ultraviolet systems contributed to the strong performance in the fourth quarter as well. With EUV sales crossing the 1.1B euro mark, 2017 was the year in which preparations for inserting EUV into high-volume chip manufacturing shifted into a higher gear. This is underlined by orders for 10 more EUV systems in the fourth quarter. Sales of our Holistic Lithography and Installed Base Management products also showed significant growth in 2017,” said ASML CEO Peter Wennink. ASML's order backlog grew to 6.7B euros, from 5.7B last quarter.

ANALYST VIEW: According to Barron's, Jefferies' analyst Masahiro Nakanomyo concluded that “the overall market should sustain brisk growth in 2018.” Despite the fact that Nakanomyo sees “a pace correction at some point” The analyst said that he sees “memory prices and semiconductor company profits” to continue their strength.

PRICE ACTION: Shares of ASML are up almost 6% to $197.19 per share in afternoon trading.

PEERS TRADE HIGHER: Shares of semi-equipment stocks are all higher, including Lam Research (LRCX), KLA-Tencor Corp (KLAC), Teradyne (TER), Applied Materials (AMAT), and Teradyne (TER).