Boeing says it will take $1 billion hit on grounding of the 737 Max jet It had been the company's best-selling plane.

Boeing announced Wednesday that it was taking an initial $1 billion hit on the global grounding of the 737 Max jet following two fatal plane crashes in five months.

The company also abandoned its previous full-year financial outlook as it grapples with the aftermath of the 737 Max fallout and works to implement software upgrades to its best-selling plane. Boeing is also halting stock buybacks which had buoyed the price of its ever-climbing shares until recently.

The initial $1 billion cost covers lower production and loss and delays of deliveries. It does not include unspecified costs of software updates and training or the liability of pending lawsuits. Boeing did not give a total cost of Max grounding.

"Across the company, we are focused on safety, returning the 737 Max to service, and earning and re-earning the trust and confidence of customers, regulators and the flying public," said Boeing CEO and Chairman Dennis Muilenburg said in a statement.

"As we work through this challenging time for our customers, stakeholders and the company, our attention remains on driving excellence in quality and performance and running a healthy sustained growth business built on strong, long-term fundamentals," he said.

The crashes of the 737 Max jets operated by Indonesia's Lion Air on Oct. 29 and by Ethiopian Airlines on March 10 killed a total of 346 people (189 and 157 deaths, respectively).

Chicago-based Boeing disclosed the information early Wednesday ahead of a call with investors.

The company reported Q1 earnings of $2.15 billion on revenue of $22.9 billion reflecting 149 commercial deliveries and higher defense and services business.

Boeing also said it is making steady progress on the path to final certification for a software update on the 737 Max, logging over 135 test flights and more than 230 hours of airtime with the software update. Nearly half of the more than 50 Max operators participated in simulator sessions, Boeing said. It did not give any guidance on when the 737 Max flights and deliveries will resume.

"I personally have flown in two of the flights," Muilenburg said on the earnings call with analysts and media. He tweeted about one of those test flights on April 3.

"Ever since the Lion Air accident our top technical experts, engineers and test pilots have been working with regulators from all over the world on a software update that will make the 737 MAX airplanes one of the safest airplanes - ever - to fly," he noted.

He sidestepped a question, however, about mistakes made with respect to the maneuvering characteristics augmentation system (MCAS), an anti-stall system involved in both fatal crashes.

“There was no surprise or gap or unknown here or something that somehow slipped through the certification,” Muilenburg said.

He also mentioned that he has asked the board of directors to create a special committee to look at the way Boeing certifies aircraft internally.

ABC News’ Christine A.Theodorou and David Kerley contributed to this report.