Take-Two Interactive Software (NASDAQ:TTWO) reported solid fourth-quarter earnings results this morning. However, the video game maker's shares took a hit as it warned the first quarter will not meet expectations, and that it may face civil charges from the SEC over prior accounting violations.

Fourth quarter revenue jumped 28% year over year to $279 million. However, though net income increased 19% to $27 million, it gained only 9% to $0.59 on a per share basis. The company reiterated sales guidance of $412 million for the first quarter and $1.2 billion for fiscal 2004, but lowered its first-quarter EPS expectation from $1.21 to $1.10. As a result, full-year earnings are expected at $2.60 per share, rather than $2.68.

But in the bigger news today, Take-Two said it had received a Wells Notice announcing a recommendation that the SEC bring civil charges "seeking an injunction and monetary damages" against the company, its chairman, an employee, and two former officers. The charges are related to the SEC investigation that began in February 2002 over certain accounting matters, internal accounting control provisions, and revenue recognition policies.

The SEC staff recommendation and earnings warning overshadow what was an otherwise strong fourth quarter, however.

On a revenue basis, Take-Two's first-quarter expectation actually represents a slight gain over last year, which saw the release of one of the all-time best sellers, Grand Theft Auto: Vice City for the Sony (NYSE:SNE) PlayStation2. Contributing to the first quarter are Manhunt for the PS2, Max Payne 2 on multiple platforms, and the Grand Theft Auto Double Pack -- shipped during the fourth quarter for the PS2, and debuting this quarter on the Microsoft (NASDAQ:MSFT) Xbox. But unlike Activision (NASDAQ:ATVI) and Electronic Arts (NASDAQ:ERTS), Take-Two hasn't quite delivered the sales punch this holiday season.

Take-Two also recently completed the acquisition of TDK Mediactive. Though the company gained licenses such as Haunted Mansion,Robotech, and Pirates of the Caribbean, its shares took a hit when the deal was done without Shrek -- TDK Mediactive's biggest license.

Take-Two shares were down almost 10% in afternoon trading. At 11 times 2004 earnings, they have an attractive look, but the extent of potential damage from the SEC is uncertain. We'll take a wait-and-see approach with this one.

Discuss video games and the SEC on the Take-Two discussion board -- only on Fool.com. Jeff Hwang can be reached at JHwang@fool.com.