What happened

Shares of hospital bed maker Hill-Rom Holdings (NYSE:HRC) have strong momentum heading into the weekend -- and heading into earnings. On Wednesday, shares of Hill-Rom surged past $132 -- a gain of more than 7% -- on reports that the company had rejected an offer from Baxter International (NYSE:BAX) to buy the company for $144 a share.

On Thursday, the shares continued to climb in anticipation of earnings day tomorrow. By close of trading Thursday, Hill-Rom stock was up 12.9% from last Friday's close.

Green line heart monitor shows a big jump.

Image source: Getty Images.

So what

Baxter's (reported) offer to buy Hill-Rom for $144 was certainly part of the reason why the stock surged this week. Indeed, it may be the only reason, sufficient to account for both yesterday's gains and today's 3.2% gain.

Why do I say that? Well, consider that Hill-Rom's Q2 earnings, due out Friday before market open, are expected to show a 66.4% decline in quarterly profit (to $0.89 per share) on less than an 8% decline in sales ($708.3 million are predicted, according to data from S&P Global Market Intelligence).

Now what

That's not a terribly optimistic forecast, and these expectations for weak sales and even weaker profits probably account for the fact that the company's stock price has lagged the S&P 500's performance over the past year.

Unless Hill-Rom pulls a rabbit out of the hat and delivers an earnings surprise Friday, the only thing standing between this stock and a renewed slump in stock price may be investors' hope that someone will come along and offer a better buyout price than Baxter just did.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.