Image source: TripAdvisor.

One of the most shocking things that can happen to a business is when it makes an alliance with a traditional rival. That's what happened with TripAdvisor (NASDAQ:TRIP) recently, as the company announced in mid-October that it would work with industry peer Priceline Group (NASDAQ:PCLN) to offer some of Priceline's online travel brands through TripAdvisor's instant booking platform. Coming into its third-quarter financial report on Thursday, TripAdvisor has already seen its share price soar, and investors are hopeful that the company can keep up its positive momentum with solid results. Let's look more closely at TripAdvisor and what it's likely to say about its performance over the past quarter.

Stats on TripAdvisor

Analyst EPS Estimate

$0.55

Change From Year-Ago EPS

14.6%

Revenue Estimate

$430.45 million

Change From Year-Ago Revenue

22%

Earnings Beats in Past 4 Quarters

0

Data source: Yahoo! Finance.

Can TripAdvisor earnings finally throttle up?
Even with the excitement from a potential partnership, investors have still been downbeat in their views on TripAdvisor earnings in recent months, cutting a penny from their third-quarter estimates and reducing their 2015 and 2016 full-year projections by 1% to 2%. The stock has held its own, recovering from a big loss during the middle of the quarter to finish up 4% since late July.

TripAdvisor's second-quarter results didn't do anything to build confidence among investors in the company's future. Sales rose by 25% from the year-ago quarter, but net income shrank by 15%, and both figures fell short of what investors had expected to see from TripAdvisor. Although the company saw subscription and transaction-based revenue nearly double, falling margins from its key hotel segment ate into its ability to produce overall growth. Currency considerations also continued to play a big role in holding TripAdvisor's growth back, costing the company about 10 percentage points of potential sales gains in the second quarter.

Yet TripAdvisor's relationship with Priceline validates the strategy that the company once known almost solely for its travel-related reviews has pursued. Under the deal, Priceline's Booking.com will begin listing branded hotel listings on TripAdvisor, allowing TripAdvisor users to book those hotels directly without having to leave the site to make the reservation. Subsequently, Priceline will handle all of the customer interactions. For Priceline, the deal gives the company another distribution channel with which to offer its growing portfolio of available hotel rooms. Yet TripAdvisor arguably benefits even more, as the success in getting Priceline on board could well spur further business from other key travel partners, producing in turn new opportunities for further growth.

Meanwhile, TripAdvisor can look to the results its other rivals have produced as a potential sign of better times ahead. Expedia (NASDAQ:EXPE) announced its own quarterly results recently, and it boosted its full-year guidance on stronger-than-expected earnings. Gross bookings rose 21% at Expedia, with gains coming particularly from a greater volume of hotel room-nights and air travel. With Expedia having merged with Orbitz, the value of partnerships like TripAdvisor's deal with Priceline is even more evident.

In the TripAdvisor earnings report, investors should look beyond the Priceline deal to make sure that the company's core travel business is performing as well as the company wants it to do. With profits traditionally falling toward the end of the calendar year, TripAdvisor needs to prove that it made the most of the high summer season to get itself back on track. Any failure to get the company's earnings and revenue moving back in the right direction could easily lead TripAdvisor to give back all the gains its stock has enjoyed recently.

Dan Caplinger owns shares of Priceline Group. The Motley Fool owns shares of and recommends Priceline Group and TripAdvisor. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.