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Defense revenues slipped somewhat, partially due to lower-than-expected deliveries of Boeing's submarine-hunting P-8 Poseidon, for which production isn't going quite as smoothly. With the Lockheed Martin-built F-35 set to replace various workhorse aircraft across the U.S. military (and the fleets of many of its allies) and overall reductions in big-ticket military buys across the globe, Boeing faces the closure of at least two major production lines (the C-17 cargo carrier and U.S. Navy workhorse F-18) and pressure on at least a few more. It also faces reduced service contracts and other ancillary revenues as other legacy systems approach end-of-life status.
A slowdown in Boeing's defense business is no insignificant matter for the company. In some years, it accounts for as much as half of the company's total revenues. Aerospace analysts have voiced concerns that the defense segment is the Achilles heel to the company's otherwise flourishing commercial jet business. But the BDS division isn't taking its punches lying down.
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