Stericycle Inc. (NASDAQ:SRCL) is gearing up to report its second-quarter financial results, which are expected to hit the wire Wednesday evening. The medical waste disposal specialist struggled a bit last quarter with both revenue and earnings missing estimates as it was weighed down by the strong dollar and weaker margins. Analysts expect some improvement this quarter as recent acquisitions should drive growth on both the top and the bottom lines. Here's what to keep an eye on when the company reports.

First, let's review
As mentioned, last quarter was a bit lackluster for Stericycle. While the company grew revenue 16.4% to $663.3 million, it missed analysts' estimates by $10 million. The culprit here was the strong dollar, which had a $23.1 million negative impact on sales. In addition to that, Stericycle's earnings only grew by 3.7% to $1.08 per share, which was two pennies shy of estimates. The issue here was weaker margins, as non-GAAP gross profit as a percentage of revenue slipped from 44.9% to 42.4%.

What analysts want to see
For the second quarter, analysts expect Stericycle to report revenue of $702.8 million, which would be up nearly 10% year over year. Meanwhile, the company is predicted to earn $1.14 per share, which would be $0.11 higher than the second quarter of last year. In stating the obvious, investors would like to see the company handily beat both numbers.

That said, beating revenue estimates will be tough, as foreign currency fluctuations likely remained a headwind for the company last quarter. That's why investors should look past the headline number and take a closer look at the adjusted revenue. As we saw last quarter, adjusted revenue would have easily beat analysts' estimates.

The other important portion of revenue to watch is the revenue that was supplied by recent acquisitions. Last quarter, the company noted that recent acquisitions boosted its top line by $86.3 million. Acquisitions should again drive revenue growth as the company acquired 15 companies last quarter alone and these new additions should drive incremental revenue growth this quarter. What investors will want to keep an eye on is if these acquisitions are paying off as expected.

Keep an eye on the future
Speaking of acquisitions, Stericycle recently announced a very large acquisition: Shred-it International, which is a global secure information destruction service provider. It's paying $2.3 billion for the business and the deal is expected to close later this year. The company sees the acquisition driving at least 10% earnings growth next year and mid- to high-teens growth in 2018.

That said, the acquisition is a bit of a deviation from the company's core medical waste disposal business. While Stericycle calls the acquisition "one of the most attractive opportunities for our business that we have ever seen," the deal hints that acquisition and organic growth opportunities in the company's core medical waste disposal business might be slowing down. What investors will want to keep an eye on is whether the company was able to acquire any additional medical waste disposal businesses in the quarter and whether its outlook for future acquisitions remains robust. Furthermore, investors will want to see recent acquisitions driving meaningful growth. What we don't want to see is the company acquiring Shred-it to fix past acquisition mistakes or to cover for lackluster growth in its core business.  

Investor takeaway
Analysts expect Stericycle to report a solid quarter, as the company's growth-by-acquisition strategy is expected to drive revenue and earnings growth. That said, don't be surprised if foreign currency fluctuations are a drag on results. Instead, look at adjusted results and focus on how well recent acquisitions performed. Finally, keep an eye on what Stericycle sees in the future as the company appears to be deviating from its medical waste disposal roll-up strategy and turning its focus on a new business segment. Ideally, we'd like to see the company proclaim to have an abundance of growth opportunities in both sectors.

Matt DiLallo owns shares of Stericycle. The Motley Fool recommends and owns shares of Stericycle. 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.