NEW YORK (CNN/Money) - Verizon Communications Inc. warned that full-year earnings and revenue will fall short of Wall Street expectations as it reported flat first-quarter earnings excluding special charges.

The nation's largest local phone company earned $1.97 billion, or 72 cents a share, excluding $2.5 billion in charges for a change in accounting procedures and to write off certain investments. That's in line with the consensus forecast of analysts surveyed by earnings tracker First Call and flat with the $1.96 billion, or 72 cents a share, it earned on the same basis a year earlier.

Including special items the company's net loss came to $501 million, or 18 cents a share, compared with net income of $1.6 billion, or 58 cents a share, a year earlier.

Revenue slipped less than 1 percent to $16.4 billion, missing the First Call forecast of $16.5 billion as well as the $16.5 billion posted a year earlier.

But Verizon said it doesn't believe it will see any meaningful effect of an economic turnaround until next year, and it now expects full-year earnings per share of $3.12 to $3.17, missing the First Call forecast of $3.18. And it said it expects revenue either to match last year's $67.2 billion or increase 1 percent, less than the 2 percent gain to $68.6 billion forecast by First Call.

Still, shares of Verizon (VZ: up $1.10 to $41.10, Research, Estimates) gained about 3 percent in morning trading Tuesday. Shares lost nearly 5 percent of their value in trading Monday in advance of the report as other telecoms reported weak results or issued warnings.