Warren Buffett.
AP Images
Warren Buffett’s Berkshire Hathaway recently bought the last 20 percent of Pilot Travel Centers.
The truck stop chain is one of America’s largest companies in terms of sales and number of employees.
Pilot generated $55 billion in nine months in 2022, more than Nike or Netflix earned that year.
This is a machine translation of an article from our US colleagues at Business Insider. It was automatically translated and checked by an editor.
Warren Buffett’s company recently acquired a company. But not just any, but one that competes in terms of revenue and headcount with some of America’s largest companies: Pilot Travel Center.
The famous investor’s company acquired the last 20 percent of it last week. He likely spent a total of over $13 billion to add the truck stop chain to a number of subsidiaries that also include Geico, Duracell and Dairy Queen.
Forbes graded Pilot entered the U.S. as the fifth-largest private company in 2022, behind U.S. companies Cargill, Koch Industries, Publix and Mars in terms of annual revenue. The company’s revenue is estimated at $70 billion in 2022, based on the $55 billion it generated in the first nine months of the year.
The company is among the 100 with the highest sales
This figure puts the company among the 100 companies in the S&P 500 with the highest revenue, ahead of Boeing ($67 billion) and IBM ($61 billion). Pilot’s revenue in 2022 likely exceeded that of corporate giants such as Nike ($47 billion), Coca-Cola ($43 billion), Starbucks ($32 billion), Netflix ($32 billion) and McDonald’s ($23 billion).
Pilot also employs more than 26,000 people – about as many as the chip manufacturer Nvidia or the payment card company Visa and about twice as many as streaming provider Netflix. However, that is only a fraction of the workforce of Nike (74,000), McDonald’s (150,000) or Walmart (2.1 million).
Pilot Travel Center’s business has low margins
Buffett’s latest conquest is strikingly large in terms of revenue and headcount, but it’s worth noting that it’s a high-volume, low-margin business. Pilot is likely to have made less than $2 billion in pretax profits in 2022, as it earned just $1.3 billion in the nine months ended Sept. 30 of that year. By comparison, Nike earned over $6 billion in pre-tax profits that fiscal year, while American Express earned nearly $10 billion.
Additionally, Pilot’s financial results weakened significantly in 2023 due to lower fuel prices and sales volumes. The company’s revenue fell 23 percent to $37 billion in the first nine months of 2023 compared to the previous year. Earnings before taxes fell 44 percent to $702 billion, according to the Third quarter results from Berkshire show. With these numbers, Berkshire is on track to post full-year profits of $56 billion and $936 million.
Pilot probably wasn’t as big a revenue generator last year as it will be in 2022. But the company’s size is undeniably impressive, and it’s likely that it will be an important cog in Berkshire’s money machine going forward.
External content not available
Your privacy settings prevent the loading and display of all external content (e.g. graphics, tables, subscription login) and social networks (e.g. Youtube, Twitter, Facebook, Instagram etc.). To display this, please activate the settings in the privacy settings.
Change privacy settings