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Brokerages expect United Parcel Service, Inc. (NYSE:UPS) to post $22.34 billion in sales for the current fiscal quarter, Zacks Investment Research reports. Five analysts have provided estimates for United Parcel Service’s earnings. The highest sales estimate is $23.73 billion and the lowest is $19.90 billion. United Parcel Service reported sales of $20.46 billion during the same quarter last year, which would suggest a positive year over year growth rate of 9.2%. The business is expected to announce its next quarterly earnings report on Thursday, July 29th.

According to Zacks, analysts expect that United Parcel Service will report full-year sales of $90.80 billion for the current financial year, with estimates ranging from $82.12 billion to $95.30 billion. For the next year, analysts expect that the company will post sales of $93.21 billion, with estimates ranging from $83.06 billion to $99.57 billion. Zacks Investment Research’s sales averages are an average based on a survey of research analysts that follow United Parcel Service.

The external fund manager backed by Berkshire Hathaway’s Charlie Munger, Li Lu, makes no bones about it when he says ‘The biggest investment risk is not the volatility of prices, but whether you will suffer a permanent loss of capital.’ So it seems the smart money knows that debt – which is usually involved in bankruptcies – is a very important factor, when you assess how risky a company is. As with many other companies United Parcel Service, Inc. (NYSE:UPS) makes use of debt. But the more important question is: how much risk is that debt creating?

When Is Debt Dangerous?

Generally speaking, debt only becomes a real problem when a company can’t easily pay it off, either by raising capital or with its own cash flow. Ultimately, if the company can’t fulfill its legal obligations to repay debt, shareholders could walk away with nothing. However, a more common (but still painful) scenario is that it has to raise new equity capital at a low price, thus permanently diluting shareholders. Of course, plenty of companies use debt to fund growth, without any negative consequences. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.

Louisville-based UPS Airlines has been as busy as ever during the Covid-19 pandemic, delivering hundreds of millions of doses of vaccines, and at the same time handling more packages with the continued growth of e-commerce, says Jim Mayer, public relations manager for the company.

“The federal government and governments around the world have designated UPS employees as essential workers and we’ve gone to great lengths to keep them safe, with measures including masks, gloves and hand sanitizer; enhanced cleaning of facilities, vehicles and aircraft; education on social distancing and other public health measures; and extensive work with U.S. and foreign governments to ensure the safety of our pilots as they transit virus hotspots,” Mayer said by email.

There seem to be two primary drivers at UPS these days. The Covid-19 pandemic. And a new CEO. Both came on the scene at about the same time last year. In March, the World Health Organization declared the novel coronavirus a global pandemic. That same month the United Parcel Service Inc. board of directors announced Carol Tomé would be the company’s next CEO effective June 1. The announcement marked a departure from UPS’ typical practice. Its three previous CEOs were promoted from within the company.

Despite having spent 24 years at the Home Depot, most recently as its CFO, Tomé is no stranger to Big Brown. Having served on the Atlanta-based logistic giant’s board of directors since 2003, Tomé is somewhat of a hybrid or “someone that is a bit of an inside outsider,” said Jane Stevenson, vice chair of board and CEO services at Korn Ferry. “In a situation where you have a defined culture, [a hybrid] might bridge the risk of bringing in a complete outsider while at the same time inserting some change,” she said. Tomé’s one-year tenure has brought several changes to a company that has traditionally been as low-key as its trademark color. “You definitely have a different tone coming out of the C-suite at UPS,” said Jack Atkins, a long-time transportation and logistics analyst and managing director at Stephens Research. “They’re clearly very focused on being, to borrow a line from [Tomé], ‘better not bigger,’” Atkins said. “You’ve seen them take actions on the revenue side and they decided to sell UPS Freight.”