Sierra Wireless (NASDAQ:SWIR) will report its third-quarter earnings after the closing bell on Wednesday, Nov. 5. Wall Street's analysts expect the Internet of Things specialist to report $138.8 million in revenue and $0.13 in adjusted earnings per share. These expectations are roughly in line with the midpoint of company guidance, as Sierra projected it would generate anywhere from $137 million-$140 million in revenue, resulting in anywhere from $0.12-$0.15 in earnings per share.

These figures give us a starting point from which to examine Sierra's potential third-quarter results, but they're only one piece to the company's puzzle. Let's take a look at some of the most important things to watch for when Sierra Wireless reports its earnings later this week.

Can Sierra keep up its recent progress?
Sierra sold off its AirCard business early in 2013, which forced the company to modify the way it reported its finances for already-completed quarters to discount the impact of the divested segment. As a result, Sierra's "current" financial data ex-Aircard only dates back to the start of 2012 -- but that's still enough time to give us a reasonable picture of progress. The refocused Sierra has been fairly consistent at growing its top line, but its growth has actually improved throughout 2014:

Source: Sierra Wireless earnings reports.

Let's look at the bottom line now.

In most cases, we would examine a company's final EPS figures, which include all sources of income, but Sierra's comprehensive EPS from 2012 and 2013 doesn't paint an accurate picture of the company's progress, as it included gains from the AirCard business and its eventual sale. We'll instead focus on Sierra's EPS only from continuing operations, which shows a company that's rapidly improved its profitability since divesting AirCard:

Source: Sierra Wireless earnings reports.
Note: EPS figures are based on non-GAAP earnings from continuing operations.

Sierra ceased counting any gains from AirCard on its bottom line this year, so what you see for the final three quarters of the EPS chart is effectively what you get for Sierra's overall profitability.

The company's adjusted quarterly EPS has ranged quite widely over the past two years, with some quarters falling far below the year-ago period's result and others more than doubling earlier results. The upcoming third quarter, however, looks to be the most moderate of the past two years, as the midpoint of Sierra's guidance only anticipates 27% EPS growth year over year, which is the smallest year-over-year increase or decrease in EPS since the company switched to its new reporting format. Trailing 12-month EPS figures also paint a more consistent picture of progress.

Consider this anticipated EPS growth rate in conjunction with Sierra's revenue guidance, which anticipates 23% year-over-year growth at its midpoint, and you can see a company that's found its groove. That 23% growth rate would be the highest rate of year-over-year growth for Sierra's top line for its post-AirCard period, and this is the first year in which Sierra's produce year-over-year EPS growth from continuing operations for consecutive quarters. This is the mark of a strengthening business -- stronger top-line growth and consistent bottom-line improvements.

However, Sierra's success in the third quarter may depend on how well it can grow its two core segments. Let's take a look at them now.

Will Sierra's enterprise segment start accelerating?
Ever since it's decided to focus on two core segments -- OEM Solutions and Enterprise Solutions -- it's been clear that the bulk of Sierra's revenue comes from sales to OEMs, or original equipment manufacturers, while its enterprise segment has far superior margins:

Source: Sierra Wireless earnings reports.

It's hard to represent the growth of Sierra's much smaller enterprise segment when it's side-by-side with a segment that's consistently brought at least 85% of the company's total revenue for the past two and a half years, but what we can see is that its gross margin is usually about twice as large as Sierra's OEM segment. However, it is worth noting that enterprise segment revenue is growing faster than OEM revenue, with the former up by 40% in two years (from the second quarter of 2012 to the second quarter of 2014) and the latter up by 52% over the same time frame.

The difference is small enough that the two segments have kept roughly the same share of overall company revenues over the past two years, but Sierra's management mentioned in its last quarterly earnings call that they are "committed to scaling Enterprise Solutions, not just organically, but through acquisitions." Management has also highlighted a global shift toward 4G wireless capabilities, and the development and deployment of "smart cities" and the smart grid as a big driver of future enterprise segment gains.

Two acquisitions closed this year that have been folded into Sierra's enterprise segment, and they're already contributing a significant part of that segment's total revenue -- organic enterprise segment revenue growth (without the two acquisitions) was 16.8% in the second quarter, while total segment revenue growth was 27%, the second-fastest year-over-year growth rate for the enterprise segment since Sierra reorganized following the AirCard sale.

Investors are eagerly awaiting Sierra's third-quarter report, and with good reason. This small but ambitious Internet of Things developer has had a lot of ups and downs this year, but a strong quarter could put Sierra's stock back on the steady growth track it followed for much of 2013.