Dell Inc. (NDAQ: DELL) shares fell sharply today after the company announced disappointing results in it’s latest 8-K filing with the SEC. The computer-maker cited high-than-expected costs as the reason behind its earnings shortfall despite laying off 3,200 employees and taking other cost-cutting measures. Many shareholders are now questioning the company’s ability to execute upon its long awaited turnaround plan that is now facing another setback. So, is Dell a stock worth buying at these depressed levels or perhaps more of a short candidate than anything else?

Many investors are concerned about the chronic cost increases that Dell faces in the computer hardware business. During the fourth quarter, the company saw its revenues expand 10% while its operating income and net income both fell by 6%. This is a clear indication that profitability was waning due to either increased costs or lower selling prices. Gone are the days where Dell’s superior inventory management and online selling provided it with a competitive advantage. Now, even Dell faces lower selling prices across the board while its costs are going up due to expansion outside of pure Internet sales.

“While Dell continues to drive towards a world-class cost structure and competitiveness we have much work to do,” Mr. Dell said. “Resurgent growth puts us on a strong footing to improve our cost position, scale expenses and enhance productivity across our business. I am confident that from this base we can continue to drive improvements in profitability.”

The kicker was a short outlook where the company stated that it will “continue to incur costs as it realigns its business to improve growth and profitability” which may “adversely impact the company’s near-term performance”. Dell also hinted that it expects a slowdown in consumer demand as customers display more “conservative spending” as a result of the credit crunch. Combined, these comments are likely what sent shares down today as investors now know that they shouldn’t expect results to improve at all in the near-term.

The one bright spot in its future is sales growth seen in countries outside of the United States, which was up 16 percent and now account for nearly half of the company’s total revenues. Growth was particularly strongin BRIC (Brazil, Russia, India, China) countries where revenues grew 36 percent on a 50 percent increase in units. Meanwhile, Asia Pacific countries and Japan saw revenue growth of 28 percent while Americas International revenue grew 22 percent. Dell will likely continue to rely on strong growth abroad to offset what will obviously be lower sales in the US as consumer credit continues to be a problem.

In the end, this is another disappointing quarter for Dell shareholders. The company’s old paradigm no longer works in today’s world and we have yet to see if it can adapt and turn itself around. Overseas growth in emerging markets has done exceptionally well, but the company will need to reign in its costs before it can regain any trust. Regardless, it is a stock that is definitely worth watching over the next year or so as it attempts to maneuver a turnaround!

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