When Dell, Inc. (NASDAQ: DELL) reported earnings just recently, the world's second largest computer maker showed above-average revenue but profits lagged expectations due to higher costs in the quarter. Meanwhile competitor Hewlett-Packard Corp. (NYSE: HPQ) reported a stellar quarter on everything from revenue to profit to future guidance. It seems as though Dell and HP have completely traded places from where they stood in 2004, no?

Dell brings up the issue of bigger-than-expected costs being a problem in the third quarter as it tries to explain why its profits sunk. Inquiring investors want to know why component prices were a problem for Dell in the back half of 2007 when HP saw lower component costs in the same period?

Your guess is as good as mine, but the questions won't stop there. For a company that built a reputation around being lean all the way around, what happened to Dell's cost structure recently? That has not been answered directly -- yet.

Dell CFO Don Carty brings up the matter of finding an over-abundance of "low-value work" that Dell is trying to eliminate. It's cut only 2.5% of the planned 10% of the company workforce this year, so it's behind schedule when it comes to chopping costs by reducing headcount. What's taking so long? Was the Dell culture left behind from former CEO Kevin Rollins completely out of whack?

Hard to tell, but when Cary also says that "We have more manual work going on than we need," something is amiss. Dell's business model employing automation in the manufacturing line apparently has not carried over into other areas of the business. It would not be surprising to see manual bookkeeping in the company and a huge amount of manual processes that require employees. Perhaps that is what Carty is referring to.

But the real sign of desperation, as I've said before, is Dell's lighting-fast acquisition strategy and the restocking of the upper ranks with a ton of new blood from outside the company. The company still has a lot of work to do, but having uncontrollable costs and buying companies to please Wall Street immediately are just a few of the problems needing a fix.