NEW YORK (TheStreet) -- Investors should listen to what Facebook (FB) - Get Report says about its revenue growth and spending when it reports earnings on Wednesday, according to Scott Kessler, an equity analyst at S&P Capital IQ.

"If the company can show that it still has robust growth ahead, and it's controlling expenses, I think that will be a recipe for an encouraging second-quarter earnings report," stated Kessler. The analyst pointed out the strong dollar had a negative impact on revenue last quarter, and margins were negatively impacted by Facebook's aggressive ramp up of new offerings and features.

But Kessler does expect to see margin improvement when the company reports results. Wall Street analysts expect Facebook to earn 47 cents a share, on revenue of just under $4 billion. 

"What a lot of people don't realize is that they have a number of levers to growth that they've just started to pull," said Kessler, who cited video, Instagram, Messenger and WhatsApp as growth vehicles. "We wouldn't be surprised if the company spent a little bit more time talking about Instagram, all the efforts that they've undertaken with respect to advertising and how they've been doing."

Kessler said Facebook is making substantial inroads into turning Instagram,  a free photo-sharing site, into a global social media platform that is generating revenue and profits. Kessler said the Instagram deal was a "slam dunk" but that it will take a while for Facebook to realize the potential from the WhatsApp acquisition.

S&P Capital IQ has held a buy rating on Facebook for over a year. Kessler said while some people believe Facebook is overvalued, he doesn't see it that way. "We don't really see a premium valuation for what is, we think, kind of a core bellwether type name in technology [and] in Internet that has a lot of growth ahead of it, a strong balance sheet and a lot of ways to win," noted Kessler. He sees 30% to 40% earnings growth for Facebook next year.