* EBITDA down 8.4 pct to 2.20 bln euros vs consensus 2.21 bln
* Revenues down 11.9 pct to 5.19 bln euros vs consensus 5.22 bln
* CEO expects "progressive acceleration" in recovery
* Shares down 2 pct, as Italy mobile trend disappoints (Adds analyst comment, details on mobile trends)
By Danilo Masoni
MILAN, May 13 (Reuters) - Telecom Italia said on Tuesday it expected a gradual recovery in earnings this year after posting an 8.4 percent fall in first-quarter core profit to reflect declining sales in Italy and a weaker currency in Brazil.
Its mobile business in Italy was weaker than some had expected due to a fierce price war with rivals including Vodafone and Vimpelcom's Wind, while its messaging services are threatened by online rivals, such as Facebook Inc's WhatsApp.
By 0936 GMT, shares in Italy's largest telecoms company, fell 2.7 percent at 0.900 euros, underperforming an 0.6 percent fall in the European telecoms index.
"EBITDA was slightly below our estimates, which incorporated a better trend of domestic margins with a slower decline in sales from (mobile business) Tim Italia," said ICBPI analyst Stefano Vulpiani in a note.
The weak domestic results mean the company will have to work harder to meet its targets for stable revenue and profit in 2016. Analysts, however, forecast 2016 revenue will fall 2 percent from 2014, while core profit will slip 3 percent, according to Thomson Reuters data.
"As a whole we are in line with our plans and targets, which see a progressive acceleration in year-on-year recovery," Chief Executive Marco Patuano, who was confirmed in his post in a board renewal in April, said in a statement.
Overall results were in line with market expectations, thanks to a Brazil, which makes almost a third of its total turnover. First-quarter sales in the south American market, where it operates thorough its TIM Participacoes unit, were stable in local currency terms.
Telecom Italia posted 2.20 billion euros in core profit, or earning before interest, taxes, depreciation and amortisation (EBITDA), broadly in line with a Thomson Reuters I/B/E/S consensus. Revenues fell 11.9 percent to 5.19 billion euros, against a consensus forecast of 5.22 billion.
The quarterly decline in Italian mobile revenues of 14.4 percent was larger than expected, an analyst said.
Telecom Italia said it saw a gradual recovery in operating performance in Italy, helped by cost cutting measures.
Patuano, who took the top job at the former monopoly in October, is carrying out asset disposals to cut debt and fund investments with the aim of keeping revenue and core profit stable by 2016.
Adjusted net debt edged up to 27.5 billion euros, slightly above a consensus estimate of 27.2 billion.
Since his arrival the stock has gained 45 percent, helped by speculation of possible consolidation in Brazil, its second-largest market where it operates through wireless operator TIM Brazil. ($1 = 0.7270 Euros) (Editing by Jason Neely and Louise Heavens)