WASHINGTON — Altria Group swung to a loss in the third quarter as it wrote down the value of its investment in e-cigarette maker Juul, which has become the primary target of a political backlash against vaping.

Richmond, Virginia-based Altria bought roughly a third of Juul for $13 billion last December. On Thursday the company said it would take a $4.5 billion write-down on its investment in the San Francisco company.

Since last year, Juul has been hit by new federal and state investigations into its marketing amid an explosion of underage vaping among teenagers. Separately, an outbreak of lung injuries tied to vaping has led to new government warnings and restrictions around e-cigarettes.

Altria executives said the cut to Juul’s value reflects recent vaping bans put in place by state and local authorities and expected restrictions by the federal government. The U.S. Food and Drug Administration is expected to soon outline new restrictions on vaping flavours, a step intended to curb youth appeal.

Juul has made a number of voluntary concessions in an effort to weather the firestorm, including halting product advertising and pulling several of its flavoured products .

A lawsuit filed in California earlier this week by a former Juul executive levelled new allegations against the company. The former finance executive alleged that the company disregarded quality and safety procedures, leading to the shipment of tainted mint-flavoured pods.

The company said the lawsuit is “baseless.” And the company’s former CEO, Kevin Burns, rejected the account in a statement.

“As CEO, I had the company make huge investments in product quality, and the facts will show this claim is absolutely false and pure fiction,” said Burns, through a spokesperson. Burns was replaced as CEO last month by a former Altria executive.

Altria Group Inc. said Thursday it posted a quarterly loss of $2.6 billion, or $1.39 per share, including the $4.5 billion pretax write-down, compared with net income of $1.94 billion, or $1.03 per share, a year earlier. Adjusted earnings of $1.19 per share beat the average Street estimate of $1.14 per share, based on an analyst survey by Zacks.

Altria, the maker of Marlboro cigarettes and Copenhagen chew, has been working to shift its business away from traditional tobacco amid steady declines. The U.S. smoking rate has been falling for decades amid smoking bans, higher taxes and public health efforts urging smokers to quit and discouraging young people from ever starting.

Altria recently began selling a heat-not-burn cigarette alternative, iQOS , made by Philip Morris International. Altria is marketing the first-of-a-kind device in the U.S. under a licensing deal with the international tobacco maker. Both companies say the device could appeal to smokers who have been unwilling to switch to vaping products, which use a nicotine solution, not tobacco.

Altria, which owns Philip Morris USA, said total revenue was virtually flat at $6.86 billion. Its adjusted revenue, which excludes excise taxes, totalled $5.41 billion and beat estimates.

The company still expects to earn $4.19 to $4.27 per share for the full year, representing growth of 5% to 7% over last year. It lowered its long-term growth target of 7% to 9% to a new range of 5% to 8% growth for 2020 through 2022.

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This story has been corrected to show that adjusted earnings per share in the latest quarter totalled $1.19, not $1.08.

Matthew Perrone, The Associated Press

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