England's higher education watchdog said there were uncertainties about the futures of some universities, although the chances of a significant number of them failing were "low".
The Office for Students (OfS) report said Brexit and its impact on the recruitment of foreign students could affect universities' financial viability.
The data shows that the sector is expecting to report broadly similar levels of income of £35 billion over three years, with an expected decline in 2020-21 to below levels achieved in 2018-19.
Institutions have forecast that tuition fee income from international students in 2020-21 will drop by 10.4 per cent to £5.4bn.
Professor Geoff Layer, vice-chancellor at the University of Wolverhampton, said the university was having to deal with rising costs brought on by the pandemic.
He said: "The university remains in a financially stable position despite the challenges presented by the pandemic.
"Like all universities we are very mindful of the challenges we all face in these times. Our student numbers have increased and our students and staff are all working hard to offer the best possible student experience.
"Our operating costs will increase as a result of providing as safe a campus as we can in respect of Covid-19 but this is manageable. Demand for entry in the coming academic year continues to increase."
A Birmingham City University spokesman said: "The university is fortunate to be in a financially stable position. We are aware of the economic effects of the pandemic on a range of industries and will continue to monitor this situation closely.
"We have been pleased to welcome good numbers of new students this year, and have been supporting them in their studies on campus and online."
The OfS report says: "Although the aggregate financial position is sound, there is still very significant uncertainty as the pandemic continues, so the situation could change quickly.
"Issues that could impact on income include higher numbers of students dropping out, reduced income from accommodation and conference facilities or impact of Covid-19 restrictions."
It also notes that 2020-21 is the final year that EU students can enter English universities on the same fee and financial support terms as UK students.
The report said: "Aggregate EU tuition fee income has gradually declined since the 2016 referendum and in the run up to the UK's exit from the EU.
"The detail of the UK's future relationship with the EU will also have currently uncertain implications for other EU-related activities of the English higher education sector."
The analysis, based on financial data submitted by registered English institutions in October, says "the likelihood of multiple providers exiting the sector in a disorderly way due to financial failure is low at this time."
But the watchdog will be closely monitoring a small group of providers amid concerns about short-term financial viability.