Rio Tinto beat expectations

Rio Tinto's results have just been released and underlying earnings were $9.3 billion, a beat on market expectations.

The company is also planning a $2 billion share buyback and will increase its dividend by 12% to $2.15 per share.

Analysts were expecting underlying earnings of $US8.9 billion.

Here are the numbers:

Rio Tinto/BI Australia

The big miner has been cutting costs, increasing ore output, pulling back on capital spending and cutting debt.

A strengthening US dollar and cheaper oil prices helped bottom line.

Rio CEO Sam Walsh said: "Last year, we made a clear commitment to materially increase cash returns to our shareholders. We have delivered this today through a 12% increase in our full year dividend and a proposed $2 billion share buy-back. These represent a total cash return to shareholders, in respect of 2014, of almost $6 billion."

Operating in a lower cost commodity environment - the price of iron ore fell by almost half throughout 2014 - Walsh said the company has continued to increase volumes and reduce costs. The miner has reduced its net debt level by $5.6 billion to $12.5 billion.

"With lower commodity prices and uncertain global economic trends, the operating environment remains tough," Walsh said.

The company is expecting a further $750 million in cash cost improvements and expects capital expenditure (capex, the amount of money a commodity company invest in developing new projects) will fall to less than $7 billion before the year is out.

Capex is expected to remain flat at $7 billion for the next few years.