American Water Works Company, Inc. AWK will release first quarter 2016 financial results after the market closes on May 4, 2016. In the prior quarter, this water and wastewater utility reported a negative earnings surprise of 3.51%. However, we expect American Water Works to surpass earnings estimates this time around.Why a Likely Positive Surprise?Our proven model shows that American Water Works is likely to beat earnings because it has the right combination of two key ingredients. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen.Positive Zacks ESP: This is because the Most Accurate estimate stands at 47 cents while the Zacks Consensus Estimate is pegged at 46 cents, resulting in +2.17% ESP.Zacks Rank: American Water Works’ Zacks Rank #3 increases the predictive power of the ESP, and when combined with +2.17% ESP, a beat appears to be quite likely this quarter.We caution against stocks with a Zacks Ranks #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.Surprise History The above chart indicates that American Water Works was able to register positive earnings surprises in three of the last four quarters. The average positive earnings surprise was 2.13%.What's Driving the Better Than Expected Earnings?American Water Works stands to gain from the $1.4 billion investments made in 2015 to strengthen its existing infrastructure. Last year, strategic acquisitions and organic growth helped the company to add nearly 42,000 customers to its customer base. These positives will definitely boost its first quarter results.American Water Works’ focus to manage its costs efficiently and spread its businesses through new contracts and customers will have a positive impact on its results. Stocks to ConsiderAmerican Water Works apart we do not have any other water utility worth considering on the basis of our model. Rather we suggest some operators in the broader utility sector worth considering on the basis of our model, which shows that they have the right combination of elements to post an earnings beat this quarter:Hawaiian Electric Industries Inc. HE has an earnings ESP of +2.7% and carries a Zacks Rank #3. It is expected to report earnings on May 4, 2016.Consolidated Edison, Inc. ED has an earnings ESP of +0.82% and carries a Zacks Rank #3. It is expected to report earnings on May 5, 2016.TELUS Corp. TU has an earnings ESP of +4.0% and carries a Zacks Rank #2. It is expected to report earnings on May 5, 2016.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 HAWAIIAN ELEC (HE): Free Stock Analysis Report CONSOL EDISON (ED): Free Stock Analysis Report AMER WATER WORK (AWK): Free Stock Analysis Report TELUS CORP (TU): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research