Expedia EXPE is slated to report first quarter earnings results on Apr 28 after the bell. The company has missed estimates in each of the last four quarters at an average rate of 97.20%. So going by the historical performance, its chances of a positive surprise are nil. Let’s see what the Zacks methodology says.According to Zacks, a company with a Buy (Zacks Rank #1 or #2) or Hold rating (Zacks Rank #3) will have a good chance of beating estimates if it also has a positive ESP.Expedia has a Zacks Rank #3 and ESP 0.00, so it doesn’t satisfy the Zacks criteria. Hence it’s difficult to predict a positive surprise for the company.To top it all, valuation looks rich, which could mean limited upward movement in response to results.Industry TrendsExpedia and other online travel booking sites like Priceline PCLN, MakeMyTrip MMYT and lately TripAdisor TRIP have a love-hate relationship with their supplier hotels. On the one hand, hotels need these companies to sell inventory. Their brand names and loyal customer bases are of vital importance for this reason. They also generally spend a lot more on technology, which makes their platforms more user friendly. But on the other hand, they charge a hefty sum (in the range of 15%) for the service that hotels aren’t eager to part with.This is the perfect market for Google, which offers a much cheaper platform on which hotels can advertise. Google also has a huge and loyal user base and very effective targeting systems, which could benefit hotels.Factors Affecting The Current QuarterDespite the negative backdrop, it’s definitely not all doom and gloom for Expedia.The company has focused on acquisitions to strengthen its domestic business and also grow in some international markets. It also made an important acquisition in HomeAway to maximize on the vacation rental opportunity. These acquisitions will pave the way to growth although there could be temporary hiccups during the integration process.The company’s China strategy also can’t be faulted. The China market is highly competitive and therefore, the business is very low-margin. Investing in the business would have further depleted profits despite the uncertain payback period. Therefore, the offloading of eLong and the Ctrip inventory sharing was the perfect solution for Expedia. The move helped it exit the business at a profit while at the same time ensuring dollar denominated revenue flow.There is also reason to believe that customer loyalty is on the rise. In the last quarter, management said that one in four room nights in the fourth quarter were booked using a mobile device with over 40% of traffic arriving on mobile devices. Repeat purchase on mobile devices means that more people are downloading its app. This tends to create stickiness in the customer base as people tend to keep using an app they have downloaded (as long as they were satisfied the first time!). This also creates leverage with hotels.Bottom LineExpedia doesn’t have a very good track record, but the company is doing what it takes for long term growth. So there is a certain amount of uncertainty in near-term results. Therefore, while we don’t recommend buying the shares to benefit from the earnings announcement, we do think long term investors should hang on to the shares.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report EXPEDIA INC (EXPE): Free Stock Analysis Report PRICELINE.COM (PCLN): Free Stock Analysis Report MAKEMYTRIP LTD (MMYT): Free Stock Analysis Report TRIPADVISOR INC (TRIP): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research