Netflix reports weaker-than-expected new subscriptions in the second quarter

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Netflix missed its own estimates - as well as Wall Street's projections - on subscriber growth by 1 million new accounts when the streaming giant reported its second-quarter financial results on Monday afternoon, sending its stock price tumbling more than 10 percent in the process.

Despite this, Netflix added 5.1 million households over the three-month period - giving it 130 million subscribers overall with 57.4 million in the United States and nine million in the UK.

The streaming giant reported overall membership growth was 5.2 million - the same as the second quarter previous year - but was lower than its forecast of 6.2 million.

Wall Street had been betting that Netflix would deliver outsized growth as demand for online entertainment increases around the globe.

"The quarter is a reminder that Netflix's cadence of net adds is not linear, but lumpy in nature", said Justin Patterson, an analyst with Raymond James and Associates in San Francisco, while pointing to the absence of a new hit series as a driver.

Shares of Netflix, which have more than doubled since the start of the year, dropped by around 14 percent in after-hours trading. Yet while revenue rose more than 40 percent, it lagged the $3.94 billion analysts' had expected.

In a letter to shareholders, Netflix said it had a "a strong but not stellar" second quarter. For this quarter, Netflix added 4.5 million subscribers internationally, equivalent to an 8% growth. Netflix now has 130 million total subscribers, with more than half coming from outside the U.S.

Despite the subscriber miss, Netflix CEO Reed Hastings said the company's fundamentals have never been stronger.

Netflix also fell short when it came to revenue predictions. However, the company took the opportunity to brag about overtaking HBO in the Emmy nomination race this year, breaking the latter's 17-year run.

In the letter to shareholders, Netflix said it expected more competition from worldwide players including ProSiebenSat 1 Media in Germany and on-demand service Salto in France.

Netflix cited an array of competitors, starting with YouTube.

Walt Disney is hoping to close on a deal to buy prized entertainment franchises from 21st Century Fox to feed into a video streaming service Disney will debut next year. "Our strategy is to simply keep improving, as we've been doing every year in the past".

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