Warren Buffett's company bought out a truck-stop business with bigger revenues than Nike, Coke, or Netflix


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Warren Buffett.AP Images

  • Warren Buffett’s Berkshire Hathaway recently bought the final 20% of Pilot Travel Centers.

  • The truck-stop chain ranks among America’s biggest companies in terms of revenue and headcount.

  • Pilot made $55 billion in nine months in 2022, more than Nike or Netflix’s annual revenue that year.

Warren Buffett’s company recently bought out a business that rivals some of America’s largest companies in revenue and headcount.

The famed investor’s company acquired the final 20% of Pilot Travel Centers last week. It likely spent over $13 billion in total to add the truck-stop chain to a stable of subsidiaries that includes Geico, Duracell, and Dairy Queen.

Forbes ranked Pilot as the nation’s fifth-largest private company in 2022, behind only Cargill, Koch Industries, Publix, and Mars in annual revenue. The business raked in an estimated $70 billion of revenue in 2022, based on the $55 billion it generated in the first nine months of that year.

That figure puts it comfortably within the S&P 500’s top 100 companies by revenue for that year, ahead of Boeing ($67 billion) and IBM ($61 billion). Pilot’s revenue likely dwarfed that of corporate giants like Nike ($47 billion), Coca-Cola ($43 billion), Starbucks ($32 billion), Netflix ($32 billion), and McDonald’s ($23 billion) in 2022.

Pilot also employs upwards of 26,000 people — about the same number of workers as Nvidia or Visa, and roughly double Netflix’s headcount. However, that’s a fraction of the size of the workforces at Nike (74,000), McDonald’s (150,000), or Walmart (2.1 million).

Buffett’s latest conquest is strikingly large in terms of revenue and headcount, but it’s worth noting it’s a high-volume, low-margin business. Pilot likely earned under $2 billion of pre-tax income in 2022, given it made only $1.3 billion in the nine months to September 30 that year. For comparison, Nike racked up over $6 billion of pre-tax income that financial year,while American Express made nearly $10 billion.

Moreover, Pilot’s financials weakened considerably in 2023 due to lower fuel prices and sales volumes. Its revenues fell by 23% year-on-year to $37 billion, and pre-tax income tanked by 44% to $702 million, in the first nine months of 2023, Berkshire’s third-quarter earnings show. Those figures put it on track to make about $56 billion and $936 million in profits for the full year.

Pilot probably wasn’t as big a revenue generator last year as it was in 2022. But it’s undeniably formidable in scale, and likely to be a key cog in Berkshire’s money machine going forward.

Read the original article on Business Insider



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